The Euro falls again on Tuesday

The EUR/USD pair broke down below the 1.19 level but continues to show a bit of stubborn resiliency. This is typical this pair though, because it is the favorite market of high-frequency traders with the low spread, and that keeps the EUR/USD pair rather choppy. In general, I believe that the downward pressure will continue to be a major influence on this market, so if we bounce a bit towards the 1.19 level, I would anticipate a lot of selling in that area, perhaps extending to the 1.20 level.

The market will more than likely see a summer of strength in the US dollar, as interest rates are rising in America, while the ECB, BOJ, and BOC have all suggested that interest rates may stay low for a longer amount of time than people thought. This of course has money in the flowing naturally towards the United States, and of course there is a bit of geopolitical concern out there as well that can drive the US dollar higher.

Concurrently, we have major issues in Italy and other major European economies. The economic numbers aren’t exactly thrilling out of the EU, so I recognize that the overall attitude should be pro-American during most of the summer. In fact, I don’t have any interest in buying this pair until we break above the thick red line at the 1.21 handle, something that looks very unlikely to happen anytime soon. The 1.15 level underneath could be an area where we see a bit of a “floor”, but we still have a way to go to get there.

EUR/USD Forecast Video 09.05.18