The Euro has fallen during the course of the trading week to break down below the 1.1850 level, an area that of course has been important a couple of times in the past. With this being the case, you should also take a look at the daily chart, because it has formed a “H pattern”, which is typically a very negative situation for the market going forward. With this, it is very likely that we will continue to see momentum, and if we do break down below the 1.17 level on a move lower, that opens up another 100 pips to the downside.
EUR/USD Video 05.07.21
What is so there are a lot of questions when it comes to where we go next. At the very least, this is a market that shows confusion, and therefore you should keep that in mind. All things been equal, this is a market that certainly looks threatened, and the more confusion you see in markets, typically the better off the US dollar will do as it is considered to be a safety currency. If for no other reason, people start buying treasuries to protect their accounts.
It is not until we take out the one point to zero level that I would be convinced of any type of recovery, at least as things stand right now. Nonetheless, the market continues to be very noisy in general, so I do think what we are looking at is more chop than anything else. Like most other charts right now, I prefer trading daily simply because it gives you a little bit clearer picture as to where we are going. At this point, the weekly chart seems to be pointing lower.
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This article was originally posted on FX Empire
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