EUR/USD Weekly Price Forecast – Euro tests resistance again for the week

The Euro rallied a bit during the week, slamming into the 1.15 level, an area that has been important more than once. However, as we close out the week we are not able to get above it, and therefore I think that it makes sense we will continue to see choppiness.
Christopher Lewis
EUR/USD weekly chart, February 04, 2019

The Euro initially pulled back a bit during the trading week but turned around to reach towards the 1.15 handle above. If we can break above that level, then we could continue to go higher, perhaps as high as the 1.18 level above. However, what we have seen is a lot of volatility and choppiness as we have several different competing issues. The first one of course is that the Federal Reserve has found itself having to reassure the markets with a more dovish than anticipated statement, meaning that we could have a bit of US dollar weakness.

EUR USD Forecast Video 04.02.19

While this should be good for the Euro longer-term, the biggest problem that we have here is that European economic numbers are not improving. Beyond that, Italy is technically in a recession now, something that obviously will do any favors for the value of the currency itself. It is because of this that I think although we are almost certainly trying to form some type of base or bottoming pattern, you will more than  likely have to be extraordinarily patient with any long positions. As far as shorting is concerned, I think that the 1.13 level is massive support and I think overall it’s likely that we will not be able to break and sustain a move below that level. That being said, the move to the 1.18 level could take months at the rate we are moving.

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