EUR/USD Forecast: December 2018
The Euro continues to be very choppy during the month of November, testing the 1.13 handle but it does look as if it is trying to find a bit of support. There are a lot of concerns about the European Union right now, but towards the end of November, the Federal Reserve suddenly appears to be backpedaling on some of its aggressive rate hikes coming out. I think at this point, the 1.12 level, which is roughly the 61.8% Fibonacci retracement level, and perhaps even extending all the way down to the 1.11 handle, could be massive support for longer-term traders.
I think the real situation to pay attention to is what we are doing in relation to the 1.15 handle. If we can break above that level, then I think that the Euro will go looking towards the 1.18 handle above. I believe that the pair is going to be very choppy and sideways in general, but that’s nothing new as it has become the domain of high-frequency traders. The Euro is something that you scout, don’t necessarily play for longer-term moves. I suspect that the month of December is going to be very erratic, as end of year flows will be noisy.
If we were to break down below the 1.11 handle, that opens the door to much lower pricing. I don’t expect that, but then again you never know what’s going to go on with Italy. A “no deal Brexit” could also have a negative connotation for the Euro, but I think we are simply looking at a Euro that is historically cheap, so there are going to be certain traders out there willing to pick it up at these low levels. However, if we don’t break above the 1.15 handle, I think it’s just going to be crazy amounts of noise this month.
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