The Euro has initially tried to rally during the day on Monday but gave back early gains to turn around and show signs of exhaustion. Ultimately, this is a market that I think will have to figure out what to do next, but it certainly looks as if we are more likely than not to continue drifting lower based upon the early action on Monday. The market has been in a downtrend for a while, and it would make a certain amount of sense that it would continue. Because of this, the market is more likely than not going to continue to see a lot of pressure, especially if we get more of a “risk-off” attitude.
EUR/USD Video 22.03.22
On the upside, if we were to break above the recent highs of the last week or so, then we could go looking towards the 50 Day EMA, or perhaps even the 1.12 level, an area that had previously been support. The market should see a lot of selling pressure in that area, but if we were to see the daily candle close above that level, it could change the overall short-term attitude. As things stand now, it certainly looks as if the market favors the downside still, so I am not overly concerned about going long.
On the downside, we could go as low as 1.0850 to test the recent lows, perhaps even lower than that. This makes sense due to the interest rate differential between the United States and the European Union, which is a continuing factor in this pair as the German Bund but negative again.
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This article was originally posted on FX Empire
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