EUR/USD Weekly Price Forecast – the Euro continues to drift lower

The Euro has broken down during the week but has also rallied a bit to show signs of life. At this point in time, the 1.10 level looks to be significant resistance as it is a large, round, psychologically significant figure. At this point, the market looks likely to continue to go lower, but we may get a short-term bounce. Either way though, there’s nothing on this chart that suggests you should be a buyer of the Euro, and of course the fundamentals don’t line up that way either. Remember, the European Union is slipping into recession and of course offers negative yields. On the other hand, the US dollar has benefited by positive yields in the bond markets, and of course the strength of the US economy.

EUR USD Forecast Video 07.10.19

At this point, rallies should be sold into, as they have been for 18 months. At this point also, the 1.0750 level underneath features a gap that has yet to be filled, so at this point it’s likely that it will eventually. Overall, I like the idea of shorting the market every time it rallies, and then holding to the gap. Beyond that though, the market is well below the 61.8% Fibonacci retracement level, and therefore it’s likely that we could go looking towards the 100% Fibonacci retracement level which is closer to the 1.04 handle. Obviously, that’s the longer-term situation, and could take quite some time to get down there if we do in fact fulfill that move.

Please let us know what you think in the comments below