Will the USD take EUR/USD to new lows?
Updating on this pair since my last post on 4/11/19, I highlighted how important the levels we had been trading at were to decide the next direction for this pair.
We were at pinnacle levels for this pair where a break above 1.1180 which would have meant we had a trend changing scenario on our hands or should we see price fail to break this level we would see this pair continue in its long term short downtrend. With the initial push lower the first target for any short trades was 1.10750 acting as a “neckline” support to the “double top” that had just been created. Last week we saw yet another twist for the USD that we have repeatedly seen over the past 4 weeks, turning itself from what was previously a very bearish week into a very bullish week resulting in pushing this pair lower once again.
Currently we trade within touching distance of another very important and strong weekly support level of 1.1000 and we can expect price to come and test this level before deciding its next move.
On the Weekly and Daily chart we are very bearish on this pair which suggest we have the momentum to continue this push lower. The USD is following of the back of a very bullish week so should this continue we could break and completely bypass the 1.1000 level, so we are very dependent on the USD behaviour this week so keep a close eye on it!
President Trump is due to speak later today which could cause some movement with the USD price as we are all aware how unpredictable any speech or even a tweet from Mr Trump can be!
On the daily chart this pair has done all the right things to suggest further downside. A break of the double top range, retest as resistance and then a continuation. Though we are very bearish the weekly level has to be taken into consideration and could be where this bearish run stops for a breather and price consolidates/forms a retracement before continuing lower.
We may either see a strong break of 1.1000 where on a retest as resistance we can look for short opportunities to go even lower or we may find support at 1.1000 temporarily and see a rally back towards 1.1075 where we would then have to re-evaluate the current state of affairs.
All eyes on 1.1000 ......