The EUR/USD pair continues to see selling, as the French fiscal and political problems continue to be a mover of markets. With this, traders are looking to find “cheap dollars.”
EUR/USD
The day opened with a gap lower in the euro as we continue to see a lot of noisy behavior, but we are trying to break back above the 1.12 level. This is a pair that I think continues to see a lot of problems in France dragging it down, and the market is certainly favoring the U.S. dollar for safety, if nothing else.
Top Regulated Brokers
When you look at this pair, you can see we are a little overdone, so it is not overly surprising to see some consolidation here. I still look at rallies as selling opportunities. We have seen a little bit of that during the Monday session. A break above 1.1350 could change some things, but we are 150 pips or so from there right now.
Breaking down from here opens up the possibility of a grind towards the 1.10 level
As things stand right now, without some type of significant change in France, that is what I am aiming for. This pair does tend to be very choppy, and therefore it is not a huge surprise to see a lot of back and forth over the last couple of weeks, but it has already priced in quite a bit. We are down 5 handles from the middle of September, so it has been a pretty big move. I think we are just taking a bit of a breather.
Rallies at this point, for me, are just selling opportunities. I have no interest whatsoever in buying the euro, especially against the U.S. dollar. The interest rate differential continues to favor America, and if we break down below the area right around 1.11, then I think it opens up a move to 1.10. It could even drop down to 1.08 if things get out of hand.
On the other hand, if we do get a daily close above 1.1350, then I reassess the situation, especially if the fiscal and political situation in France has abated.
Ready to trade our Forex EUR/USD forecast? We’ve shortlisted the best European brokers in the industry for you.