Free Profitable Forex Newsletter
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Not Much Has Changed Since The Start Of The Year - EURUSD To Provide Selling Opportunities Toward 1.10
Amazingly, the slow and choppy downtrend that started at the end of last year continues to this day. EURUSD recently made new lows for the year and then quickly rebounded, even above the 1.1200 level.
Things keep going from bad to worse for the Euro
Overall, nothing much has changed from a technical analysis point of you and the choppy downtrend remains intact. On the fundamental side, things continue to go from bad to worse for the Eurozone and the Euro currency as has been the case since November last year (when the choppy downtrend began).
Now, with Brexit even at a worse stage than last year, the prospects for EURUSD look grim. A “hard” Brexit is becoming increasingly likely with Boris Johnson as the new UK Prime Minister and such a negative scenario will not only be shocking for GBP but also for the closest trading partner of the UK which is the Eurozone. So, the Euro is set to also suffer badly on further negative headlines about Brexit.
On the other fronts, the economy continues to falter and is near the recessionary point. The ECB has prepared to take action again by lowering interest rates further into negative territory and restarting QE. Overall, nothing positive to support the Euro here either.
On the US side, things are not looking bright there either, but are brighter for the US Dollar compared to the Euro. The increased trade tensions globally are supportive of safe-haven currencies, such as the US Dollar. Further, the US economy is still the best performing major economy and the US Dollar will not reverse for as long as that is the case.
Hence, given all the above, the odds suggest that EURUSD is set for another decline toward the 1.1000 area, although it may get there slow and on a rocky road. The next week will be when this opportunity could be presented and it could prove our assumptions true if EURUSD breaks the aforementioned range to the downside.
The technical aspects are shown on the chart below:
- Look for short entries next week on a bearish breakout of the current 1.1175 - 1.1210 trading range. This will confirm a bearish reversal and EURUSD will likely continue to fall further in this case.
Stop loss:
- Place the stop behind the breakout point, either above the broken support or the top of the trading range above 1.1200.
Targets:
- 1st - 1.1100 area
- 2nd - 1.1000 area
Trade signals from the past week
- July 31, 2019 – Short EURUSD from 1.1130, trade closed at 1.1045 = +85 pips profit
TOTAL: +85 pips in the past week
TOTAL: +1185 pips profit since October 1, 2018
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