The Euro fell below the 1.18 level for the first time in months during the trading session on Wednesday. This of course is a break of a major round figure, so it will attract a lot of attention. I believe at this point it’s likely that we will eventually try to get to the 1.15 level, but a short-term bounce may happen between now and then. I think that the 1.1850 level will offer a significant amount of resistance above, so I would be surprised to see this market break above there. Keep in mind that part of the reason this market has been falling is due to interest rates rising in the United States, with the 10 year note breaking above 3.06% being a major driver of US dollar strength when it happens.
I think rallies are to be faded at this point, as they cannot sustain any amount of momentum. We may get the occasional short-term burst higher, but it’s only a matter of time before the sellers return. I think the 1.15 level is much more significant based upon the longer-term charts, and of course it would be a 100% retracement of the entire move that we had recently seen higher. Now that we are below the 61.8% Fibonacci retracement level, that is quite often the target. With this in mind, I believe that selling short-term rallies that show signs of exhaustion is a good way to start a position, and then you add a little bit to it every time we make a fresh, new low.
Euro to Dollar Forecast Video 17.05.18
This article was originally posted on FX Empire
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