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Eurusdidea

EURUSDThe euro went back and forth last week as the 1.05 level continues to offer support. That being said, the market looks as if it is going to continue to be very noisy, and will pay close attention to that 1.05 level. The 1.05 level is an area where we have seen a lot of support underneath, and therefore I think we are looking at a situation where the market breaking down below there could kick off more selling, but I believe it will more likely than not be difficult to break through. The most likely scenario is a short-term rally that will sell off the closer we get to the 1.08 level.
Short
by SmoothJB
1
EURUSDThe Euro has fallen hard during the trading session on Thursday to threaten the 1.05 level. The 1.05 level of course is a large, round, psychologically significant figure, and an area that has been important multiple times. Because of this, it is not overly surprising that we stall in this area. If we rally from here, it is likely that we will continue to see plenty of pressure. The 1.08 level above is a significant barrier, and the 50 Day EMA seems to be racing towards it, which is yet another reason to think that the market will find plenty of sellers. On a breakdown below the 1.05 level, then we are more likely than not will try to get down to the 1.04 level. The 1.03 level underneath is the bottom of the overall consolidation that we had seen previously, and therefore it is likely that we continue to be influenced by the previous action. Ultimately, I do think that we can get down to the 1.03 level, but it is going to be very choppy, and not very easy. As far as buying the Euro is concerned, we would need to see a massive shift in attitude, and perhaps a break above the 50 Day EMA. Furthermore, the 1.0933 level is an area where we have seen a lot of selling pressure as well. If we can clear all of that, the market is likely to turn around and go much higher. That would obviously take a major shift in attitude from the Federal Reserve and of course the European Central Bank as well. The market will continue to see a lot of volatility, and quite frankly I think that is going to be the norm in almost all currency pairs. The interest rate differential between the United States and Germany still dictates that we need to go lower, and of course rallies at this point should be thought of as value for the US dollar. Getting a little bit of a bounce should be thought of as a nice opportunity, but you should also keep in mind that the pair very rarely moves in one direction for very long, so it is going to be difficult to trade this directly off of the daily chart. However, I will not hesitate to use the one hour chart.
Short
by SmoothJB
EurUsd can drop to 0.85-0.90 zone (long term outlook)Even I, who have been trading for 20y I'm used to a stronger Eur than Usd, so this outlook may seem fantastic, but in my opinion, both fundamentals and technicals are sustaining a drop under parity for EurUsd. Looking at the monthly posted chart we can clearly see that since the 2008 crisis, EurUsd is in a downtrend and the only deviation from this trend was the 2020 break of the trend line that stopped in horizontal support and proved to be a false one in the end with the pair getting back under. Indeed, at this moment, EurUsd is trading in a very strong technical support, but if we look closer at price evolution we can see that every little rally is sold (see yesterday's attempt of correction). That being said, in the long run, I expect a drop under parity, and a 0.85 price is really not out of the question, on the contrary, is very probable at this moment.
Short
by Mihai_Iacob
12
EURUSDThe euro initially gapped higher to kick off the Monday session but has given back all of the gains to slam into the 1.05 level again. The 1.05 level is an area that should continue to attract a lot of attention because it is a large, round, psychologically significant figure, and the fact that it is an area where we have seen support and resistance in the past. At this point, the euro is struggling due to a massive amount of problems in the European Union. The first thing would be that we could be looking at a serious lack of energy. That would destroy the European economy, and that could cause a significant amount of downward pressure on growth. The size of the candlestick is not necessarily crucial or impressive, but it does suggest that we still have quite a bit of negative pressure. Ultimately, I think that rallies will continue to be sold into as there seems to be no real hope of that situation sorting itself out. The market rallying will offer a nice opportunity to pick up “cheap US dollars” at the first signs of exhaustion in this market. Ultimately, the market is in a very negative downtrend, and I do not think that is going to change anytime soon. That being said, you should keep in mind that the area below is going to be difficult to chew through, but as long as the Federal Reserve continues to be hawkish, it is difficult to bet against the US dollar. Furthermore, we have a Federal Reserve meeting coming out that people will be looking for a 50 bps rate hike at the least, and some are even starting to price in 75 bps. If the statement suggests that they are “on autopilot” to add 50 bps every meeting, that is going to continue to drive money into the greenback. Economic numbers out of the European Union are very weak at the moment, and they do not look like they are improving. With all of that being said and the complete lack of risk appetite out there, I just do not see how this pair will change anything anytime soon. I like the idea of fading rallies as it gives a bit of value to what is the strongest currency right now.
Short
by SmoothJB
EurUsd- Can correct to 1.0750-1.08 zoneOne thing is clear, EurUsd is in a strong downtrend. However, as I said in my previous analysis, the pair is now in a very strong support zone and a correction is probable. Looking at the posted hourly chart we can see that EurUsd has formed a base in this zone and we can have a corrective leg up. Resistance is in the 1.0750-1.08 zone and in this zone, short-term traders can close their long positions. A new low would negate this scenario
Long
by Mihai_Iacob
5
EURUSDThe Euro has had a very rough month of April, and the way we are closing out the month suggests that we may have further negativity ahead. It is worth noting that we have tested the 1.05 level, an area that is a large, round, psychologically significant figure. This area could offer a little bit of profit-taking and a short-term bounce. However, that bounce should end up being a nice selling opportunity and I think that will be the theme of the month of May for the Euro. The 1.08 level is an area that has been important on the way down as well as previous resistance. All things being equal, the market continues to see a lot of negativity out there, as the interest rate differential between the European Union and the United States has caused a lot of downward pressure. The US dollar is also a place that people run to when they are looking to find a bit of safety. As long as that is going to be the case, and it certainly looks as if there are plenty of reasons for that to be, I do believe that this pair will continue to find plenty of sellers. However, this does not necessarily mean that we fall straight down to the bottom. Short-term rallies will occur, perhaps lasting a couple of days. At the first signs of exhaustion, I am more than willing to start shorting this market, because quite frankly the trend is so strong, and it is also worth noting that Europe has a major issue in the form of a lack of energy. They are stuck in a situation where they will have to do something about Russian natural gas, and a lack of natural gas is disastrous for the outlook of the European economy. The 1.08 level above is significant resistance. If we were to overtake that area to the upside, then we might have the opportunity to go to the 1.10 level. However, I do not necessarily think that is as likely as giving up gains much sooner than that, and I will be shorting at the first signs of exhaustion on every rally. I do not think that the Euro is going to reverse the trend anytime soon, so I certainly have a downward bias when it comes to this market.
by SmoothJB
2