Euro Collapses During the Week

The Euro has struggled to say the least during the previous week, as we have sliced through the 1.12 level like it was not even there. With that being said, the market is very likely to continue going lower, perhaps reaching towards the crucial 1.10 level underneath. That is an area that I think will attract a lot of attention from a psychology standpoint, and of course has been important more than once in the past. That being said, I think this is a market that continues to see a lot of volatility to say the least, as there is so much fear out there most traders have no idea what to do with it. The US dollar continues to be the ultimate safety currency, and therefore it will be interesting to see whether or not it remains sought after.

EUR/USD Video 31.01.22

With the ECB nowhere near tightening monetary policy, it does make a certain amount of sense that the Euro continues to lose ground to the greenback, and therefore I think this is a secular trend that could go much lower. That does not necessarily mean it needs to implode, but this candlestick most certainly is sending a message, and does suggest that we are going lower over the longer term. Rallies at this point in time should only end up being selling opportunities if you are patient enough. Obviously, you need to keep your position size reasonable in a highly volatile market like this, but you should keep your eye on the longer-term trend, which is most decidedly negative.

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