The Euro has initially tried to rally during the course of the session on Tuesday but then fell rather significantly to puke all the gains almost immediately. The market has been falling like a hot knife through butter, and it seems as if there is almost nothing to keep this market from breaking down below the 1.13 level. Eventually, we should get some type of recovery, but this is a significant move and therefore I think there is a lot behind it.
EUR/USD Video 17.11.21
When you look at the European Central Bank, it is worth noting that they are extraordinarily dovish while the Federal Reserve is starting to taper, showing signs of hawkishness. At this point, the Federal Reserve continues to be the biggest central bank in the world to show signs of tightening, and therefore the US dollar is going to continue to show strength. This is especially true in a place like Europe which not only has to worry about the dovishness of the central bank, but the fact that we are continuing to see lockdown measures in places like Germany and Austria.
The US dollar got a bit of a boost during the day as well, as retail sales in the United States came out much stronger than anticipated, which shows that the US economy is far outperforming the European economy. Looking at this chart, I anticipate that my target of 1.1250 might actually be a bit conservative, so I will be paying close attention to this market over the next several days. At this point, I do not see a scenario in which I would be a buyer, but I will let you know as soon as that changes.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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