The Euro has broken down rather significantly during the course of the week, slicing through the 1.13 level. By doing so, the market looks very likely to see an attempt to get down to the 1.10 level, but quite frankly we have been overdone at this point, so I still believe that we could get some type of bounce. All things been equal, I think that the market will eventually continue to reach towards the 1.1450 level, and then sell off yet again. At this point time, the market is likely to see whether or not the Germans and Austrians lock everything down, which they certainly look as if they are going to.
EUR/USD Video 22.11.21
The market is most certainly oversold, so I am looking for shorter-term charts to giving idea as to when to sell again. As far as buying is concerned, I do not have any interest, but it is worth noting that the 1.16 level above being cleared would of course be a very bullish sign, but we are three handles away from there right now, so it is not even a thought at the moment.
That being said, it would take a clearance of that level for me to get bullish, unless something fundamentally changes. Right now, it looks as if the ECB is nowhere near tightening its monetary policy, so it just makes no sense to get long of the Euro, especially as the Federal Reserve is tapering bond purchases. That will continue to be the main driver, but the fact that we are starting to see Europe try to kill its own economy again will certainly accelerate this process.
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This article was originally posted on FX Empire
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