The Euro has broken down significantly during the trading session on Tuesday, breaking below the 1.08 handle, and a scene that is very interesting due to the fact that there seems to be no bottom in this market right now. The 1.0750 level underneath should offer a bit of support though due to the fact that there was a massive gap formed there, and therefore it’s likely to see an area that could find support. That being said, it has been my target for some time but at this point it’s difficult to get involved and start selling the Euro at this point, because quite frankly it is a scenario where it would be chasing the trade.
EUR/USD Video 19.02.20
Rallies at this point are interesting set up though, because I like the idea of shorting the Euro at higher levels, closer to the 1.09 level if we can get some bounce from there. Above there, the 1.10 level would also be important. Looking for some type of exhaustive daily candle will be the way going forward, but overall one would have to think that sooner or later there will be a massive short covering rally.
If the market breaks down below the gap, then it really becomes a question of whether or not the 1.05 level will offer some type of support. As far as buying the Euro is concerned, it’s almost impossible to do so, considering that the economic situation continues to favor the United States and it seems like the situation in the European Union is only getting worse. Ultimately, this is a market that is essentially a falling knife, and you don’t want to be trying to catch it.
This article was originally posted on FX Empire
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