EUR/USD Forecast 07/10: Bounce Offers Selling Opportunity

(MENAFN- Daily Forex) The euro bounced slightly in the early part of the day, as we continue to see a bit of trouble coming out of French yields. As those yields have eased a touch today, it's not a surprise that we bounced.

EUR/USD

The euro has rallied a little bit during the trading session here on Tuesday, although I don't know that I would get overly excited about it. We have fallen apart recently, and there are multiple reasons for it, not least of which would be French rates, which had gotten out of control.

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There are a lot of concerns about French debt at the moment, and France, being the second-largest economy in the European Union, is obviously a problem for the euro. That being said, this is a market that will more likely than not pay attention not only to French yields, but also to the energy inflation that we continue to see out there at this juncture, I think, are going to be selling opportunities.

After all, U.S. yields continue to rise, so it makes the U.S. dollar attractive anyway. Then, on top of that, we have the fact that despite the dropping odds of a U.S. rate hike during the month of October, they are still pricing one in for December.

I'm especially interested in the 1.14 level, but we'll wait to see if I get that. Obviously, if everything changes and we get there, I won't short it, but I believe fading rallies will continue to be the way forward here. Perhaps looking toward the 1.10 level on a longer-term chart as a potential target, due to the massive support in that region.

EURUSD Chart by TradingView

As things stand at the moment, I just don't have any interest whatsoever in trying to buy the euro. This is a market where, if you are patient enough, you should see an opportunity to buy“cheap dollars.”

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