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MENAFN- Daily Forex) Potential signal:
If we break the 0.82 level, I would short this pair with a stop loss at the 0.8260 level. I would aim for at least 0.80 below.
The euro did initially try to rally a bit during the trading session on Wednesday but has gotten absolutely hammered against the British pound. This does make a certain amount of sense because we obviously have a lot of political issues in France and the German business confidence number looks absolutely abysmal. In fact, they are the same as during the height of the COVID pandemic. So this does not bode well for Europe.
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From a technical analysis standpoint, you can see that over the last couple of days, we had reached the 50 day EMA, which has offered a bit of a barrier and a downtrend line. Now it looks like the market is respecting that yet again.
Coming Up
The next couple of days, we'll bring a couple of major central bank announcements, one of which is the Bank of England, which is expected to hold rates steady at 4.75%. At the same time, you have all of those economic issues in Europe, and let us not forget, there's a land war right on the periphery.
Granted, it doesn't look like it's expanding, but that's not necessarily a good look either. Going into a little bit more of a deep dive, you see that energy prices are spiking yet again during the winter. So it all leads to slower economic growth coming out of the European Union. There is also the possibility of a trade war via tariffs with the United States with the incoming Trump administration.
EURUSD Chart by TradingView
All of this spells bad news for Europe and specifically the currency. With that being said, I am still fading short-term rallies, but if we break down below the 0.82 level, look out below. This thing's going to crumble.
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