EUR/USD Weekly Price Forecast – Euro breaks through the downtrend line
The Euro rallied during the week, breaking the top of a couple of shooting stars, which of course is a very bullish sign. However, the market ran into a lot of trouble at the 1.18 level, an area that of course has been resistance in the past. I think that the market pulling back it makes a lot of sense, because quite frankly that’s an area that has been so important in the past. Beyond that, Teresa May rocked the markets by suggesting that perhaps there would be a “no deal Brexit”, which of course has its own ramifications for the European Union. This had a lot of money flowing to the US dollar and away from the British pound, and some of the knock on effect was found over here.
Your capital is at risk
However, I think this market will continue to look at this area as very important, but if we do break above there, then I think the market will probably go to the 1.20 level next. Overall, I think that breaking above the downtrend line is a good sign, especially considering that we also broke above the shooting stars. I think that the previous downtrend line should offer support, and it does line up very nicely with the shooting stars, so I think the buyers are already starting to come back in. I don’t think it’s good to be easy to break above the 1.18 level though, but if we get some daily candles closing above there, the market should be ready to take off.