Euro Breaks Higher Based Upon Rumors

[ad_1]

I still think that it is easier for the euro to fall than rise, but that does not necessarily mean we will get that move.

The euro broke higher on Wednesday as rumors broke out that perhaps the Russians and the Ukrainians could come to some type of peace agreement. Since then, we have seen a little bit of walking back, so now the question is whether or not there is any hope? The euro rallied as a result, but it is short-term at best. As you can see, the euro tested the 50-day EMA, and even the 1.11 handle before pulling back a bit. This is a market that has been in a downtrend long before the war, and for many other reasons.

Advertisement

The 1.10 level underneath might be the target, but it might also take a little bit of time to get there. If we were to break down below the 1.10 level, then it is possible that we could break all the way down to the 1.08 level. The market has seen a lot of resistance just above, and it has been confirmed during the session on Wednesday. That being said, it is not that anything can be guaranteed, but it certainly looks as if it is an area where we are going to run into trouble.

The area between 1.11 and 1.12 is a huge barrier of resistance, so I do think it makes sense that we would struggle in that region. Ultimately, this is a market that needs to break above the 1.12 level to be impressive enough to start buying. If that were to happen, then it is possible that the euro could go looking towards the 200-day EMA, possibly even the 1.15 handle. That obviously would be a complete change in attitude, but it remains to be seen whether or not that could actually happen.

We are still very much in a downtrend, and that is something that you should keep in the back of your mind. Because of this, I still think that it is easier for the euro to fall than rise, but that does not necessarily mean we will get that move. The US dollar will get strengthened due to more of a “risk-off” type of attitude, or the simple fact that the European economy is a bit of a mess. This is not so much about the dollar at the moment though, it is more about the euro.

[ad_2]

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Before using xMetaMarkets services, please acknowledge all of the risks associated with trading.

The content of this website must not be construed as personal advice. We recommend that you seek advice from an independent financial advisor.

The information on this website is not directed to residents of certain jurisdictions such as United States, Canada, Iran, Cuba, France, and some other regions, and is not intended for distribution to, or use by, any person in any countries or jurisdictions where such distribution or use would be contrary to local law or regulation.

© 2018 - 2024 xMetaMarkets.com. All Rights Reserved.