The Euro initially rallied a bit during the trading session on Monday to kick off the week, but as you can see has continued to show signs of softness. The 1.08 level was an area that I was interested in looking for support at, and we are still close enough to that region that it will have a certain amount of effect, but if the market breaks down below the Friday candlestick it more than likely will open up the path down towards the 1.07 handle, followed by the 1.0650 level after that. At this point, short-term rallies should be thought of as potential selling opportunities.
EUR/USD Video 07.04.20
All things being equal, I do think that we continue to go lower due to the issues with the European Union by that doesn’t necessarily mean we do it in a straight line. Short-term rallies will continue to be sold into, so I look at any rally at this point as an opportunity. That being said though, I do think that we will eventually crash into the bottom. There are far too many issues out there to think that the European Union is going to suddenly come out of the malaise from the virus. Beyond that, it was already weak and struggling before we even got the virus spreading through the region. In that scenario, it’s very difficult to imagine that the economy suddenly turned around and takes off. Because of this, I believe that short-term traders will continue to come in and pound this thing lower, but it will more than likely be a very noisy move.
This article was originally posted on FX Empire
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