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Euro drift lower during the trading session on Wednesday

By:
Christopher Lewis
Updated: Apr 26, 2018, 05:23 UTC

The EUR/USD pair broke down a bit during the trading session on Wednesday, reaching below the 1.22 handle. This is a negative sign, and it looks likely that this pair will continue to test support underneath, especially near the 1.21 handle.

EUR/USD daily chart, April 26, 2018

The EUR/USD pair has broken down a bit during the trading session on Wednesday, reaching towards the 1.21 level underneath. That’s an area that is massive in its importance, as it was the scene of a major breakout recently. By bouncing from that area, the market should continue the uptrend, but quite frankly we continue to see relentless pressure to the downside due to the 10-year treasury yields arising in America, putting upward pressure on the greenback.

The ECB is suggesting that perhaps significant tightening of money may be a bit farther ahead than people thought, so I think that the market will continue to punish the Euro in general, but I think this is more of the dollar move than anything else, as we have seen the greenback strengthen against almost everything. Ultimately, the market is likely to continue seeing a lot of volatility, but I think it’s good to be difficult for the market to make a larger move until we either break down below the 1.21 handle, or we start to see US dollar weakness. Short-term selling rallies probably continues to be the way the market asked, as we continue to see a bit of downward pressure overall. I recognize that the greenback is highly correlated to the 10-year yields right now, and as they rise above 3%, that has people concerned about the overall desire to own risk assets, which this pair tends to rally right along with. I think choppiness is the only thing you can count on, but it certainly looks as if it has a short-term downward pressure buildup.

Euro to Dollar Forecast Video 26.04.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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