Potential signal:
- I am selling on a break below 1.12, with a stop at 1.1250 and a target of 1.11 below.
- The euro continues to see a lot of noise at the moment, and at this point, we are still seeing a bit of concern around the French debt situation and the interest rates in the United States.
EUR/USD
The euro initially did rally a bit during the course of the trading session on Friday but then turned around to show signs of weakness. All things being equal, this is a market that has seen the 1.1250 level offer a bit of a short opportunity, and it ended up forming a bit of a shooting star.
Top Regulated Brokers
That being said, if the market were to break down below that shooting star on Monday, it could send the pair lower. Keep in mind that the interest rate differential continues to favor the United States. On top of that, you should look at this through the prism of the French debt problem still being unsolved. This is a market that will continue to watch a lot of moving pieces, and could be somewhat choppy as a result.
I am a seller of the euro. I am not a buyer. Even if we do rally from here, I'll be watching the 1.1350 level as well. On the breakdown, I believe that the euro could find itself looking towards the 1.10 level over the longer term.
The bounce made some sense here
When you look at the chart, it does make sense that we had this little bit of a bounce anyway because, quite frankly, the market was oversold. Now we have a situation where I'm looking to take advantage of cheap dollars. It looks like traders are starting to do that going into the weekend as well, as we've seen interest rates in America tick up just a touch on Friday. Remember, those inflation numbers earlier this week were pretty brutal, so sooner or later that comes to fruition as well.
Ready to trade our Forex EUR/USD forecast? We’ve shortlisted the best European brokers in the industry for you