The Euro broke down significantly during the week, slicing through the 1.17 level, an area that will cause a certain amount of psychological importance and support. The fact that we breakdown through there suggest that we are continuing to see a lot of uncertainty around the world and quite frankly with the European Union looking to lock itself down, it is difficult to imagine a scenario where the Euro is going to suddenly be going straight up in the air. Beyond that, we also got wind during the ECB press conference that the ECB is almost certainly going to be doing something next month.
EUR/USD Video 02.11.20
The Euro has recently sliced down through the uptrend line that you can see I have marked on the chart, but we are still in what a lot of people would consider to be consolidation. From a longer-term standpoint, I think it is likely that we will probably see this market continue to go down towards the 1.15 level underneath. This is an area that has been previous resistance, and now is getting ready to see the 50 and the 200 week EMA indicators race towards it. Furthermore, on the daily chart we have the 200 day EMA reaching towards that area as well, so I think it is a nice confluence for where we would see a lot of support.
The surge higher in the Euro may be a bit overdone, so a pullback towards the 1.15 level makes quite a bit of sense. After all, it would be a simple “back and fill” type of scenario. Ultimately, the market will continue to see volatility due to so many different moving pieces around the world.
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This article was originally posted on FX Empire