The Euro has fallen a bit during the course of the trading session on Monday to kick off the week on the back foot. Ultimately, when you look at this you should see that the 1.18 level has offered enough resistance to keep the market down a bit, despite the fact that the Friday candlestick was so bullish. With that being said, I think we probably have more possible attempts to the upside, but I still believe at the end of the day this is a market that cannot go much higher. The 1.1850 level is presently what I assume to be the “ceiling” in the market. The recent “death cross” of course suggests that there is a certain amount of downward pressure as well, so I believe that we still have the opportunity to fade rallies.
EUR/USD Video 17.08.21
Pay close attention to the 10 year yield, because if they yield continues to grind higher over the next several weeks, that could also offer the possibility of this market dropping from here. On the other hand, if yields dropped, it depends on why they are dropping as to what this market will do. If there is a huge rush into bonds, then it could be a safety bid, which of course will favor the US dollar as well, as the bonds of course need dollars to be bought. Because of this, it is essentially going to come down to the risk appetite of individuals around the world, as it quite often is. To the downside, the 1.17 level being broken opens up the possibility of a move down to the 1.16 level which is significant support on longer-term charts.
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