EUR/USD Weekly Price Forecast – Euro hanging on for dear life

The Euro rallied significantly after initially falling during the week to form a massive hammer. The hammer is based around the 1.14 level, an area that has been crucial more than once. Because of this, I believe that the market will probably turn around and continue to try to reach the 1.15 level, barring any bad news. I think that the US dollar is a bit overbought at this point, and quite frankly I think this week could be a bit soft for the greenback, unless of course we get more bad news from the Sino-American relations, or if Turkey enters the headlines again. Remember, a lot of the selling in the Euro has been due to concerns with the Turkish lira, and the possibility of defaults with EU banks holding so much debt.

Structurally speaking, we are just below the 50% Fibonacci retracement level, so I think it makes sense that value hunters might be returning. Beyond that, this is an area that was resistance in the past, so it should now be supported. The real test will be whether we can get above the 1.15 level. If we do, then I anticipate that the market would reenter the previous consolidation area and head towards the 1.18 level. Otherwise, if we break down below the hammer, which in and of itself is a bad sign, I suspect that the market will target the 1.12 level, which is roughly where the 61.8% Fibonacci retracement level sets.

EUR/USD Video 20.08.18