EUR/USD Price Forecast – Euro slides in early trading
The Euro initially rallied during trading on Wednesday, in reaction to the idea that the Italians were going to have less than 2% budget deficits by 2021. This is a bit of a relaxing of tensions between the Italians in the European Union, and of course it brought in some positivity in the market. However, it looks as if we continue to see volatility in this pair, as we are paying attention to so many different pieces moving at the same time. Quite frankly, with the Federal Reserve looking to raise interest rates several times over the next year or so, it will always put a bit of a headwind in this pair. However, I do see the 1.15 level underneath as being somewhat crucial, and therefore I think that we should continue to see more of the same given enough time.
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As we have seen so much consolidation over the last several months, I think that in the end the market will continue to favor going back and forth and therefore the Euro looks a little bit “cheap” at the moment. That doesn’t mean we can’t go lower, it just means that there will probably be a lot of value hunting in this general vicinity. Pay attention to the low that we are trying to form now, if it’s above the low from the previous session, it’s the very essence of forming a new trend to the upside, and perhaps eventually the 1.18 level as we have seen so many times.