EUR/USD Price Forecast – Euro Looking for Supportive Action
The Euro has initially dipped during the trading session on Monday but has turned around to show signs of life. At this point, I think the market is trying to recover from an oversold condition, and while I do think that we bounce I am not necessarily convinced that we are suddenly going to change in attitude. This is more or less a relief rally at this point, because quite frankly the Euro had been so heavily punished.
EUR/USD Video 07.12.21
That being said, it is difficult to get overly excited about an economy that is featuring lockdowns and possible mandatory vaccination situation. This cannot be good for growth, and therefore one would have to think that eventually the Euro would pay the price. Bond yields in America are dropping a bit, so that may be part of what we are seen as well. Nonetheless keep in mind that this is a market that is in a major downtrend and it is probably only a matter of time before we see that continue.
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I do think that ultimately this market will find a way to sort itself out and continue a trend, but right now we just need a little bit of stabilization in order to build up momentum to go in either direction. While I do favor the downside, if we were to break above the 50 day EMA, then I could be convinced to become a buyer. Until then, I look for signs of exhaustion after rallies that will give me an opportunity to take advantage of the longer-term trend that has been so reliable over the last several months.
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