The Euro initially tried to rally during the trading session on Tuesday, but then broke back down towards the 1.12 level, an area that has been important more than once. The question now is whether or not we bounce a bit from here to go looking towards the 1.14 handle, which is the beginning of major resistance that extends all the way to the 1.15 level. Looking at all of this choppiness, it is obvious that we are going to see more in the future, which is typically the way that people trade this market, in a very choppy manner.
EUR/USD Video 01.07.20
Looking at this chart, if we can break down below the recent lows, then it opens up a move down to the 1.10 level underneath, which is a major support level. This is an area that has recently seen a major breakout, so it would make sense that there would be a significant amount of support. To the upside, if we were to break above the 1.15 handle, then it is likely that the market could reach towards the 1.1750 level. That being said, the question is whether or not we are forming a bullish flag, or are we pulling back from major resistance?
Keep in mind that the Federal Reserve is pumping the markets with US dollars, so it is likely that it will de-value that currency, but traders will turn around and go running towards the US Treasury markets if there are major concerns out there. If that is going to be the case, it will drive the value of the greenback higher.
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This article was originally posted on FX Empire