The Euro went back and forth wildly during the trading session on Thursday, as the European Central Bank announced that they were cutting rates and that of course have decided to buy unlimited bonds. At this point, it’s essentially the ECB “throwing in the towel” when it comes to economic growth and it is akin to the central bank finally admitting what everybody else seems to know. Ultimately, this market is teetering around the 1.10 EUR level, and that is an area that will continue to attract a lot of attention. Ultimately, I would anticipate a lot of choppiness going forward with signs of exhaustion offering selling opportunities.
EURUSD analysis Video 13.09.19
Buying at this point seems to be very unlikely, even though I recognize that we could rally a bit. All things being equal this is a market that continues to look very negative longer term and quite frankly with the interest rates in the United States offering more return than the European Union, even though the Federal Reserve is likely to cut them back a bit, suggest that the Euro will continue to grind lower. In fact, with an interest rate of -0.5%, the Euro will continue to struggle against most currencies although it is possible that perhaps some of the selling will update right around this big figure and cause a bit of a bounce.
Longer-term, the 61.8% Fibonacci retracement level has been broken and typically that means that we go down to the 100% Fibonacci retracement level given enough time. That could mean a move down towards the 1.05 EUR level longer-term.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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