EUR/USD Forecast: Euro Continues to Threaten Resistance
It’s probably only a matter of time before we see the market come back to shorting the Euro.
For what it is worth, you can see that we have stopped dead in our tracks at the same highs as we had during the previous session, so Thursday looks like there is still going to be a bit of confusion and perhaps fear out there, which makes quite a bit of sense considering that the Euro is getting a lot of noise coming out of the region when it comes to potential selling, especially as energy will be a problem for the EU this winter. In other words, we may see a major breakdown in economic growth. In fact, things are getting so bad in Germany that they are starting to slow down the amount of gas being used.
At this point, the European Union has a lot of issues, not the least of which would be a flagrant lack of leadership. The interest rates in the United States continue to be much higher than the European Union, and it’s also worth noting that the ECB has to buy almost all Italian debt, because things have gotten so bad in that market. In other words, there’s no real reason to think that the European Union is suddenly going to strengthen.
Part of the bounce that we have seen in this pair has been due to the fact that the interest rates in America have slowed down a bit. Ultimately, the market is looking more at the possibility of inflation slowing down a bit in the United States, and therefore the idea is that the Federal Reserve will not have to be as tight as it had been. This is complete nonsense because inflation is still running at 8.5% year-over-year, and therefore it’s probably only a matter of time before we see the market come back to shorting the Euro. Even if we break above the 1.04 level, we still have a significant amount of resistance of the 1.06 level as well.
Ready to trade our daily Forex analysis? We’ve made a list of the best brokers to trade Forex worth using.