The Euro has had another poor week, breaking down towards the 1.10 EUR level against the greenback. This is an area that should offer quite a bit of support, but at this point there’s nothing on this chart that suggests that we are going to change the attitude of this pair. But frankly, there’s no reason to think that we will, because the fundamentals do not support the Euro at all.
Germany looks likely to head into recession, and of course bonds in Germany as well as most of the EU offer negative rates. By comparison, the United States still has positive rates on their Treasuries, so it makes sense that money is flowing to the greenback. As long as there are fears around the world, it makes sense that the US dollar will continue to be favored against most currencies anyway.
From a technical standpoint, we are well below the 61.8% Fibonacci retracement level, and quite frankly that normally means that we go racing lower, perhaps down to the 100% Fibonacci retracement level which is a bit closer to the 1.04 level. Having said that, there is a gap on this chart near the 1.07 level, so we may not make it all the way back down to the 100% Fibonacci release that level. The 50 week EMA continues offer significant resistance, so therefore I think it clearly shows that we are either going to break down from here, or rallies will be sold. Either way, it means that the greenback is going to continue to strengthen against the common currency going forward. I don’t see much on this chart that would convince traders to start buying for a longer amount of time, unless of course we did finally break above that 50 week EMA. That seems to be very unlikely at this point.
Germany looks likely to head into recession, and of course bonds in Germany as well as most of the EU offer negative rates. By comparison, the United States still has positive rates on their Treasuries, so it makes sense that money is flowing to the greenback. As long as there are fears around the world, it makes sense that the US dollar will continue to be favored against most currencies anyway.
From a technical standpoint, we are well below the 61.8% Fibonacci retracement level, and quite frankly that normally means that we go racing lower, perhaps down to the 100% Fibonacci retracement level which is a bit closer to the 1.04 level. Having said that, there is a gap on this chart near the 1.07 level, so we may not make it all the way back down to the 100% Fibonacci release that level. The 50 week EMA continues offer significant resistance, so therefore I think it clearly shows that we are either going to break down from here, or rallies will be sold. Either way, it means that the greenback is going to continue to strengthen against the common currency going forward. I don’t see much on this chart that would convince traders to start buying for a longer amount of time, unless of course we did finally break above that 50 week EMA. That seems to be very unlikely at this point.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.