Euro vs US Dollar Weekly Technical Analysis
The Euro had a very difficult week, as we continue to see a lot of negativity out there, and I think it is probably only a matter of time before we see parity tested. The parity level is an area that I think will cause a lot of noisy behavior and perhaps potential buying. Nonetheless, that is a psychological number more than anything else. After all, this is a market that I think will continue to see a lot of questions asked of any rally. After all, the market is likely to see a lot of follow-through on any significant bounce, with the 1.05 level offering significant downward pressure.
The size of the candlestick is rather impressive, and it does tell you all you need to know, that the Euro is essentially being used to potentially heat homes in the European Union this winter. The market has been selling off quite drastically, so one would have to think that there will be a very strong bear market rally, but that will also be sold into quite drastically. With interest rates on the 10 year note over 3% and the European Union in major financial trouble, there’s no real reason to think that the trend changes anytime soon. Again, there will be short covering that offers a huge bounce but think of that as offering “cheap US dollars” that you can take advantage of.
Until the Federal Reserve changes its monetary policy, there’s no real reason to think that anything changes anytime soon. That being said, as strong as the selloff has been, I would anticipate a massive bounce before a flush lower. However, if we were to break down below the parity level, that could open up a new floodgate of selling.
EUR/USD Price Forecast Video 11.07.22
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This article was originally posted on FX Empire
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