The Euro fell during the week, breaking below the 1.15 handle, an area that is massive in its importance, and now we have bounced from the 50% Fibonacci retracement level. Since we bounce from there, the market looks as if it is ready to go higher and reenter the previous consolidation between the 1.15 level and the 1.18 level above. This market continues to be very stuck in a range, and quite frankly I don’t see any reason to think that the range has been broken. The hammer from a couple of months ago continues to be the basis of support, but I think if we can break above the 1.18 level, the market will continue to reach towards the 1.20 level above.

I believe that longer-term traders are probably a bit of a disadvantage though, even though I do believe ultimately we rally. This is because we are essentially in a 300 pip range, so perhaps you are better off trading a four hour chart instead of the weekly chart if you are a longer-term trader. If we break down below the bottom of the hammer from two months ago, the market will probably break down to the 61.8 Fibonacci retracement level, or the 1.12 level at that point. A break down below there could send this market down to the beginning of the rally, but I find that very unlikely and I do believe that we are much more likely to reach towards the 1.25 level.

EUR USD Forecast Video 08.10.18

This article was originally posted on FX Empire

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