[ad_1]
I think we will continue to see plenty of reasons for this pair to continue dropping.
- The EUR/USD currency pair fell hard on Monday, reaching down to the 1.0150 level.
- This is an area that has been supported previously, extending down to the 1.01 level.
- If we were to break down below that level, then it’s likely that this market goes much lower.
- In that general vicinity, I would anticipate that this market would hear quite a bit of noise.
EUR/USD Technical Analysis
If we break it down below the 1.01 level, then it’s possible that we could go looking to the parity level underneath, an area where you would expect to see a lot of interest. In fact, we had bounced quite significantly from there previously, so I think it does make quite a bit of sense that there will be a lot of “market memory” in that area. Breaking down to the parity level then opens up the possibility of a drop-down to the 0.98 level, perhaps even down to the 0.96 level.
The European Union continues to have major problems when it comes to the overall economic performance and the problem with energy that they will undoubtedly see this winter. The European Central Bank did a little bit of monetary tightening previously while promising to buy more assets. In other words, it was for show, and not much more.
It’s worth noting that the 50-day EMA has offered significant resistance previously, so it does make a certain amount of sense that we see that as a potential resistance barrier on any type of rally, so I think we continue to fade rallies that occur. The Monday candlestick is closing toward the bottom of the range, which certainly shows negativity that should be followed through.
On the other hand, if we were to turn around and break above the 1.04 level, then we could make a run to the 1.06 level. Breaking above the 1.06 level then has me switching my overall attitude and perhaps finally buying the euro. I don’t think that it’s going to happen anytime soon, especially considering the price action that appeared on Monday. I think we will continue to see plenty of reasons for this pair to continue dropping, so any time at rallies, I will be looking for signs of exhaustion that I can jump on, just like I have been doing for the last several months.
Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers to choose from.
[ad_2]