EUR/USD Forecast 08/10: Bears Target 1.11 (Video)

(MENAFN- Daily Forex) EUR/USD

The euro has plunged again against the U.S. dollar as interest rates in the United States continue to climb.

Quite frankly, one of the biggest problems we have is not even shown on this chart. It is the French 10-year yields, which are up for the day. While that typically would be positive for a currency, it is not when there are concerns about fiscal spending in the country. This is not an inflation thing. It is not a central bank-going-to-tighten type of situation. It is concern about French debt.

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That is a major problem. In fact, the differential between France and Germany right now on the 10-year is something like 1.4%, which is pretty wide. With that being said, the euro continues to suffer as the second-largest economy in the world continues to drag it down.

Short-term rallies for me are selling opportunities

Short-term rallies for me are selling opportunities, and have been for a while. At this point, I do not really see much stopping us from going to the 1.11 level, unless, of course, the French come up with some type of plan.

But the problem is getting the budgets through Parliament. Marine Le Pen has released a fairly constrained budget that she wants to put through Parliament, but right now, the Parliament does not look likely to do that. Then, of course, there are concerns about the 2027 French elections.

EURUSD Chart by TradingView

So, it is all France's fault, at least today. Rallies at this point, I think, continue to offer cheap U.S. dollars, especially if we could somehow get to the 1.14 level. But the way this chart looks, I think 1.13 is probably a little bit of a stretch at this juncture.

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