Euro Sitting on Major Support

Euro vs US Dollar Technical Analysis

The Euro fell a bit during the trading session on Wednesday to reach the 1.0850 region, before turning around and bouncing. This is an area that has been important support multiple times, so it is likely to continue to be so. That being said, if we were to break down below that level, then it could open up a significant amount of selling, perhaps sending the Euro down to the 1.07 handle.

We are most certainly in a downtrend, and I do not see that changing anytime soon. The market then has a lot of work to do in order to break this thing down, due to the importance of the support. I think a bounce makes quite a bit of sense, as we have fallen to this level rather quickly. However, I would anticipate that the first signs of exhaustion above will be shorted again. The 50 Day EMA sits at the 1.11 level, which is an area that will continue to be very difficult. In fact, it is not until we break above the 1.12 level that I would be a buyer of the Euro.

In the light of all of this, I believe that this market will more likely than not be one that I will step away from and wait for a sign of exhaustion to get involved. The next couple of days could be about recovery, as we are more likely than not going to see an overall consolidation area. However, if we do break down below the 1.0850 level, that would be a very negative turn of events and could open up fresh selling. Interest rate differentials continue to favor the United States.

EUR/USD Price Forecast Video 07.04.22

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