EUR/USD Forecast: Euro Breaks Through Significant Support Level

Christopher Lewis

A little bit of patience probably goes a long way in this pair for the longer-term swing trader.

The Euro has fallen again during the trading session on Thursday, as the 1.16 level has been sliced through. By doing so, the market looks as if it is going to continue to see downward pressure, as the US dollar is strengthening against almost anything. Furthermore, the interest rates in America rising works against the value of the Euro as it is considered to be the “anti-dollar”, and therefore I think it makes quite a bit of sense that we see this continue.

The candlestick that formed for the day ended up being relatively negative, after initially trying to shoot to the upside. That being the case, the market is very likely to continue to see plenty of sellers every time we rally, unless of course we can turn around and take out the 1.17 level to the upside. If we can break above there, then it is likely that we could see a bit of a change, but the market still is very likely to continue to be more of a slump to the downside than anything else.

The 50 day EMA is starting to curl lower, and therefore I think it is only a matter of time before we see further pressure to the downside. Quite frankly, I think the European Union has a lot of issues out there, as supply chains break apart and of course energy becomes an issue in that continent as well. Regardless, this is a market that has been extraordinarily negative, and therefore I have no interest in trying to fight it, because we have seen a lot of downward pressure and that typically does not happen in a vacuum. In fact, when you look at this chart, you can see that we have been grinding lower for a while, and I think that is just simply what we are going to do from here, continue to grind lower.

I believe at this point in time we will continue to reach towards the 1.15 level underneath, which of course is a large, round, psychologically significant figure, and I think it is only a matter of time before the market sees that we need to test that area, and therefore a little bit of patience probably goes a long way in this pair for the longer-term swing trader.

GBP/USD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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