The euro is under renewed pressure after dropping below the uptrend line and the 50-day EMA. Analysts seem to be leaning towards the US dollar as concerns about a global economic slowdown intensify. Key resistance seems to sit at 1.18, while support lies between 1.15 and 1.14, both of which are crucial for determining the trend’s direction.
- Initially, the euro tried to climb during Monday’s trading but faced resistance at the 50-day EMA. So, it wouldn’t be surprising to see the euro drop from here.
- Overall, the market exhibits weakness by breaking below the uptrend line.
- After a brief rally, it struggled again at the uptrend line last Friday, and now it appears to be on a downward path.
During the FOMC meeting on September 17th, many speculated the USD would weaken, yet it has only strengthened since then.
That said, I think it’s likely we’ll continue seeing downward pressure in the market, and personally, I prefer the US dollar over the euro right now. There’s a lot of uncertainty surrounding the global economy, and if it indeed slows, this will negatively impact the euro. Conversely, it usually boosts the US dollar as investors flock to the US Treasury market.
Yields and 10-Year Bonds
In fact, yields are declining across the board, which might lead to an increased influx of cash into government bonds, inevitably causing the US dollar to appreciate. It’s hard to say for sure how this will all play out. I think we’re likely to encounter a lot of volatility moving forward. The question remains whether this significant upward trend will persist.
Alternatively, could we see a sideways movement that ultimately gets rejected, perhaps prompting traders to pull back some excess? At this point, we should be cautious about pursuing upward momentum too aggressively—especially until we clear that crucial 1.18 mark.
If the price falls below 1.15, we might see it drop to 1.14, which is the 200-day EMA. If we break that level downward, it would certainly signal the start of a downtrend. The market structure seems to be shifting now. The lingering question is whether Friday marked an even lower high, having already broken the previous lows.
Yet, it seems like there might be an opportunity for trading.
