Euro Sells Off Heading Into the Weekend

The Euro has initially tried to rally during the trading session on Friday but gave back the gains to show signs of weakness yet again. The 1.10 level underneath is a large, round, psychologically significant figure, but if we break it down below there, I think it is likely that the Euro goes looking towards the 1.0850 level again. The Euro is suffering at the hands of weak economic figures coming out of the European Union, as well as the war in Ukraine.

EUR/USD Video 21.03.22

On the upside, the 50 Day EMA is sitting at the 1.12 level, which is an area that previously had been support. Any rally at this point in time will more than likely struggle to get any longer-term momentum unless, of course, something drastic happens coming out of the EU. As things stand right now, there are a lot of concerns around the world, and it makes sense that the US dollar might be favored by traders due to the safety aspect.

At this point, we are simply continuing to grind lower and follow the longer-term downtrend. I believe that the US dollar will continue to strengthen against most currencies, so the Euro probably will not be any different. The candlestick from the Friday session wiped out the gains from the Thursday session, showing just how precarious that rally was going to be. Ultimately, the market did not change its overall attitude for the long term just because we rallied for a couple of days. The market was probably somewhat oversold, so this makes a certain amount of sense anyway. I still like fading rallies if and when they occur.

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