- The Euro attempted a brief rally on Friday before quickly giving back gains, reflecting persistent weakness in the pair.
- Short-term bounces continue to look like selling opportunities as resistance levels hold and broader U.S. dollar strength pressures the market.
The Euro initially tried to rally during the Friday session but gave back gains rather quickly as the market continues to show a sense of malaise. The Euro has been dropping over the last couple of months, and anytime it rallies, it seems to offer a selling opportunity. That is how this market is being approached, simply fading short-term rallies that show signs of exhaustion.
Top Regulated Brokers
Key Technical Barriers
The 50-day EMA above and the downtrend line both appear to be adding resistance. Because of this, the market seems to have a ceiling, and it is not until price breaks above those areas that any conversation about buying the Euro can begin. To the downside, the 200-day EMA sits just above the 1.14 level, a large, psychologically significant figure. The 1.14 level has been supported previously, and if it breaks, it could open the trap door to much lower levels, with a target near 1.11. While this is an ambitious goal, I think it is a nice longer-term target at this point on the break of the important 1.14 level.
Keep in mind that the U.S. dollar has been strengthening against most currencies, and the Euro will likely be no different. Fading short-term rallies that show signs of exhaustion remain the preferred approach.
There is little interest in buying this pair, as U.S. dollar strength is supported by jobs data suggesting the U.S. economy is not slowing enough to encourage meaningful dollar selling anytime soon, and the European economies at this point aren’t a threat to the dominance of the US Dollar.
Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe to check out.