EUR/USD Price Forecast – Euro fails at major resistance

The Euro fails at major resistance during the early hours on Friday, as we continue to see the 1.18 level offer major supply. · FX Empire

Christopher Lewis

Updated Fri, Sep 21, 2018, 11:01 PM

The Euro has broken down a bit during the trading session on Friday, as we tested the significant 1.18 level above, which was the top of the larger consolidation area that we have been trading in for some time. Remember, we’ve been trading between the 1.15 level on the bottom and the 1.18 level in the top. It’s not a huge surprise at all that the market finally ran into resistance there, but it also had a little bit of a “nudge” from Teresa May and the United Kingdom.

She has suggested that she’s willing to stick with her plan regardless, and that a “no deal Brexit” could be a real possibility. This has the currency markets running to the US dollar overall, and the British pound falling apart during the day. I believe at this point we are looking at the knock on effect over here, while a no deal Brexit could have some negative connotations for the European Union as well. Regardless, the simple selling of the British pound and buying of the US dollar puts more demand on the US dollar anyway. Because of this, I think we are going to go looking towards 1.17 level next, where I see a significant amount of support.

If we do break down below there, the market should then go to the 1.1650 level. The market will more than likely take a bit of a breather at that level, and I would be surprised if it happened right away. If we do break down below there then I see no reason to think this market will go down to the 1.15 level yet again. Either way, I think it worse this is a return to the consolidation area.