(2020-09-29)
EUR/USD Price Forecast – Euro Continues to Chop
The Euro rallied a bit during the trading session on Monday, reaching towards the 1.17 level, which of course has been important in the past.
The Euro has rallied significantly during the trading session on Monday, reaching towards the 1.17 level again. At this point in time, the market is likely to see a lot of resistance, due to the fact that the level is a large, round, psychologically significant figure, and of course an area where we have seen quite a bit of support in the past. The “market memory” principal should come into play here, so I do think that the market eventually will react to it. Having said that, the area certainly looks backed up by the 50 day EMA, which of course could cause some technical resistance as well.
If we do break above the 50 day EMA on a daily close, then it is possible that we may go looking towards the 1.1850 level where we had broken down originally. Quite frankly, I do not know how that happens in the short term, at least not without some type of catalyst. The European Union is starting to talk about locking down the economy again due to the coronavirus figures that are rising, so at this point it is very likely that the US dollar may get a bit of a boost.
It is also possible that we may take a look at the dollar liquidity issues and of course the Presidential election noise that is certainly going to be a major issue as well. With all of this being said, there is a huge risk of continued downward pressure. From a structural standpoint, it certainly looks as if we could break down towards the 1.15 handle, but it may be very choppy all the way to that level, as is typical with this pair. Furthermore, we have recently broken down below a “rounding top”, so it does make sense that we would do the measured move which is roughly 200 pips.
