Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

EUR/USD Likely to Fall Back Below 1.10

Currencies / Euro Mar 25, 2016 - 12:13 PM GMT

By: Richard_Cox

Currencies

The EUR/USD has fallen under the radar in recent weeks, as overall volatility in the currency space as slowed significantly.  There are a few different reasons for why this is happening, as recent central bank statements have clarified what we are likely to start seeing from both the US Federal Reserve and the European Central Bank (ECB).  To some extent, we are seeing dovish alterations in many of the previous expectations that most analysts had for both central banks.  So, it would not be entirely surprising to see some accompanying trend changes in the weeks ahead.


Chart View:  EUR/USD

Source: FiboGoup

When we look at the one-year price history in the EUR/USD, it is clear that selling pressure has resulted in a mostly sideways range above 1.05.  The pair has worked its way around important psychological levels, and the trends seen over the last few years is now showing signs of stalling.

For most of this year, we have seen higher prices in the EUR/USD pair but we now have a  double top that is forming near 1.12 that will likely deter prices going forward.  As long as this important resistance level remains intact, we should continue to see sellers enter the market toward prices below the 1.10 level.  This, of course, would be viewed as the break of a major psychological level might put continued pressure on the downside for the pair.

Dovish Federal Reserve?

At odds with this viewpoint is the potential for the US Federal Reserve to begin altering its previously hawkish interest rate policy.  When we look at the specifics of the statement that accompanied the most recent meeting, it is clear that the Fed still has some reservations about the possibility of aggressively higher rates before the end of this year.  It this does actually turn out to be an accurate representation that we are likely to see in terms of the general EUR/USD valuation. 

It will continue to be important to monitor the technical price levels for the pair, as this will be the best indication of where sentiment lies for the Euro against most of its commonly traded counterparts.  Most formidable for the EUR/USD is the fact that we have a major double top that is forming on the long term charts.  This suggests that markets have made more than one attempt to overcome the zone and failed both times.  This will make it difficult for traders to overcome this area on a third try, so it is more likely that we will see a break below 1.10 first. 

By Richard Cox

© 2015 Richard Cox - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in