EUR/USD Forecast 12/10: Bears Eye 1.10 Support

(MENAFN- Daily Forex) The EUR/USD pair continues to be very negative overall, as debt concerns in the European Union, and France in particular, continue to be a big mover in this pair.

EUR/USD

The euro tried to rally a bit during the early part of the trading session on Friday but gave back gains as we continue to see a lot of trouble in France when it comes to the fiscal situation.

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All things being equal, this is a market that is going to continue to be a fade-the-rally type of situation because rates in America are fairly strong. At the same time, we have serious concerns about the French fiscal situation and whether or not we can get a budget passed through the French Parliament. We are starting to see a little bit of contagion-or at least selling, I should say-of bonds in Italy and Greece, so that weighs upon the euro as well.

When you zoom out, you can make a real argument for the euro dropping down to the 1.10 level.

Adding on top of that the fact that energy might be a little bit scarce in Europe, this is a chart that makes a lot of sense. Short-term rallies will continue to attract sellers, as far as I can tell, at least until we get that French problem under control.

EURUSD Chart by TradingView

I think you have a ceiling somewhere around 1.14. I also see a lot of resistance at 1.13. The euro just looks like it is ready to take a nosedive. It has been pretty negative over the last several weeks, so it does not necessarily mean that it just falls out of bed right away. Nothing goes in a straight line forever, but anytime I get an opportunity to buy cheap U.S. dollars, that is exactly what I will be doing. I will short the euro and buy the dollar.

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