The Euro has shot straight up in the air again during the week, but as you can see continues to struggle with the previous uptrend line that had been so important. With that being the case, the market is likely to see a lot of noisy trading in this area, and quite frankly there seems to be a massive zone of resistance that extends from the 1.19 level to the 1.20 level. That is an area that I think continues to be a major problem for the Euro, and the fact that we are all but assured stimulus out of the United States and still cannot break above there tells me something is not quite right.
EUR/USD Video 26.10.20
The European Union obviously has a lot of issues when it comes to the coronavirus and potential lockdowns, and of course the economic numbers have been somewhat miserable. Friday had better than anticipated German PMI numbers, which was the exception, not the norm and it comes to the EU as of late. With that being the case, I think that we are likely to see more consolidation, perhaps until we either get a resolution with stimulus, or the presidential election is over in the United States.
I suspect it is probably the latter of the two in the short term that is starting to have people be a bit sideways with this market. Furthermore, we had been a bit parabolic recently, so it is not a huge surprise to see that we might struggle to go higher for a while. In other words, I expect more consolidation.
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This article was originally posted on FX Empire