Euro Trying to Recover

The Euro initially fell during the trading session on Tuesday but has found enough support below the 1.10 level to cause a little bit of a bounce. Whether or not this sticks is a completely different question, and quite frankly I do not think it does. However, we will follow the price and make our decision accordingly.

On the upside, the 1.11 level looks to be rather important, so I would anticipate a bit of resistance in this general vicinity. Anything above there will then have to deal with the 50 Day EMA and the 1.12 level after that. There are plenty of reasons to think that although we could get a little bit of a bounce, it will probably be temporary as there is so much downward pressure here.

EUR/USD Video 23.03.22

The European Union continues to suffer at the hands of slow growth, and a very dovish central bank. Furthermore, interest rate differential continues to favor the Americans, and that will be paid close attention to. Because of this, I do think that eventually, the selling comes back, and of course, the war in Ukraine can always cause a new headline to send the Euro even lower. The safety of the US dollar will more likely than not continue to attract inflows as well, so all things being equal, this is a market that should continue its longer-term downtrend.

If we did somehow break above the 1.12 level, then we could go looking towards the 1.15 level, but this would obviously be a major shift in attitude and momentum. I do not foresee that happening without something changing but will let you know as soon as I see the signs.

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