EUR/USD Forecast Today 08/01: Struggles Against USD (Video)

(MENAFN- Daily Forex)

• You can see that we initially did rally to break above the 1.04 level only to turn around and show signs of weakness again.
• It's ridiculous to think that the Euro is going to suddenly turn things around for no apparent reason.
• Just because the Euro's cheap doesn't mean it has to turn around. In fact, cheap things typically become cheaper.

Now there will come a point in time when we turn around, but there's no fundamental reason for that right now. The European economy is very weak and at the same time we have the US economy which is very strong and inflation in America is stronger than most people would like to think.

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So, with that being the case I do think you have a situation where the US dollar continues to beat up on anything it can, and the euro is one of the particularly weakest currencies as far as majors are concerned. I believe this is the“epicenter” of all things Forex at the moment, as it typically is.

Parity is Likely

I do think eventually we will get to the parity level, but we do have a jobs number on Friday, so there might be a little bit of noise here and there this week, only to see things continue to the downside. If we did rally though, I would be looking at the 1.05 level, the 50-day EMA, and the 1.06 level for signs of exhaustion that I could start shorting again, because quite frankly this is a pair that I want to be aggressively bearish of when I get the opportunity to pick up cheap dollars. That's the caveat.

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