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EUR/USD Price Forecast – Euro runs into resistance

Christopher Lewis

The Euro rallied a bit during the trading session on Friday, as we continue to see strength after the ECB announcement underwhelmed the market. This brought money back into the Euro but looking at the chart you can see we are already starting to run out of momentum. At this point I believe that the market is simply going to do what it has done for some time, chopping around back and forth and with more of a downward slant than anything else.

EUR/USD Video 16.09.19

As the European Central Bank is going to start buying over €20 billion worth of bonds per month starting in November, that continues to put downward pressure on the currency as interest rates will continue to be very low and therefore money not treated very well on the continent. Contrast that with the positive interest rates coming out of the United States, and you can see that it makes more sense for money to flow towards New York and away from Frankfurt.

The grind lower will continue to be very noisy obviously, but if we were to break above the 50 day EMA it’s likely that the market could go looking towards the 1.1150 EUR level, and then eventually the 1.12 EUR level. That of course is the alternate scenario, but one that we should keep in mind. I don’t necessarily think that buying that move should be the way to go, but rather waiting for selling opportunities every 50 pips above as the trend is most decidedly negative.

Please let us know what you think in the comments below

This article was originally posted on FX Empire

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