Euro falls initially but bounces later on Monday

The Euro fell initially during the day on Monday, but the 1.17 level offered enough psychological support to turn things around and call is a significant bounce. As we approach the 50-hour EMA, it’s possible that we could see sellers into the market, and I also believe that the 1.18 level above is psychological resistance. I think it’s only a matter of time before the sellers come back into the marketplace as interest rates in the United States continue to rise, while bond markets in the European Union, with Germany being the standout, are offering negative rates.

Longer-term, this should continue to drive this pair lower and I think we will probably go looking towards the 1.15 level underneath. The bounce has been rather significant, but I think when you look at the longer-term charts, it’s obvious that it is simply just a small bounce. I think that once we break down below the 61.8% Fibonacci retracement level in the 1.1940 level, the market is destined to take out to the downside and wipeout the rally from earlier in the year.

I don’t know if we can break down below the 1.15 handle, but if we did that would obviously be extraordinarily negative. Selling rallies continues to be the best way to trade this market, so use a little bit of patience, but wait for the market to fall back over and start shorting yet again as we have value to be found in the greenback.

EUR USD Forecast Video 22.05.18