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EUR/USD Weekly Price Forecast – Euro gets hammered

The Euro broke down significantly during the trading week, but still has to deal with the 1.10 EUR level underneath. That level being breached would be a negative turn of events, opening up the door to much lower levels.
Christopher Lewis
EUR/USD weekly chart, September 02, 2019

The Euro broke down a bit during the week, breaking through the back of the previous week, and testing the bottom of the hammer from about a month ago. That being said though, there is also the 1.10 EUR level underneath that could offer support. If that level gets breached, it opens up the door to much lower levels. I think this market eventually does break down rather significantly but in the short term it’s very likely that we get a bunch of noise. This is partially because we are at the end of summer and perhaps more importantly vacation season for traders, so volume is light.

EUR USD Forecast Video 02.09.19

All things being equal though, we have been grinding lower for some time and it makes sense considering that bond yields are positive in the United States and negative in the European Union. Money goes to where it is treated best, and right now it is treated horribly in the EU. Another thing to pay attention to is that the Germans look likely to be heading into recession, so that of course causes quite a bit of problems as well. The candle stick for the week is very negative, and is well below the 61.8% Fibonacci retracement level, a couple of reasons to think that we go much lower.

Any rally at this point in time is something that we look to start selling, because quite frankly there is so much in the way of resistance above. In fact, it’s not that we break above the 50 week moving average that I would consider going long.

Please let us know what you think in the comments below

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