- The Euro has found a little bit of support near the 1.0950 level, an area that has been important multiple times in the past.
- As a result, I do think that we may get a little bit of a bounce.
- After all, it would make a certain amount of sense due to the fact that we have seen so much in the way of selling pressure that sooner or later, we need to get some type of bounce from here.
That being said, if we were to break down below the 1.09 level, then I think you have real issues at this juncture where we could see the US dollar really take off. That being said, I do think that it's overdone and a bounce makes a certain amount of sense. Perhaps reaching the 50 day EMA, which is at the 1.1050 level. Ultimately, this is a market that is going to reflect risk appetite and if we start to see risk appetite really fall apart, then you probably see the US dollar strengthen. In general, this is a market that I think continues to be range bound overall. As a result, I think you continue to see a lot of choppiness and therefore you need to be cautious with your position sizing. But with this, I do think that we're getting a little supported.
Top Regulated Brokers
On the Breakdown
If we were to break down below the 200-day EMA on a breakdown, that really could send this market reeling, perhaps down to the 1.0775 level, which I think at that point in time you would see most RIS assets getting absolutely hammered. It's not necessarily that the euro is extraordinarily risky, it's just that it isn't the dollar, and that's probably the big thing to take away. All things being equal, this is a market that I think continues to dictate what you want to do with the US dollar against many other currencies, not just this one.
Ready to trade our EUR/USD Forex analysis? We’ve made a list of the best forex demo accounts worth trading with.