The EUR/USD fell to fresh lows yesterday as the 1.17800 ratio was challenged briefly. The EUR/USD has delivered very choppy results the past week: a high of nearly 1.18950 was seen on the 6th of June, only to be beaten back in a strong fashion. Yesterday’s high of 1.18350 approximately, also witnessed a strong surge downward until the day’s low was hit about two hours later.
As of this morning, the EUR/USD is within sight of the 1.18000 level and this may prove to be important for speculators.The EUR/USD does appear oversold from a technical viewpoint, but support levels have proven vulnerable the past month, so stepping in front of the downward trend may continue to be a costly endeavor. However, it still seems like a stretch to believe the EUR/USD will test lows seen in late March and early April when the Forex pair was trading near the 1.17050 mark.
As recently as the 25th of May, the EUR/USD was trading near a high of 1.22720. What has happened since then that has caused such a dramatic shift in the momentum of value? The USD has certainly grown stronger across the board in Forex as financial institutions have likely positioned their cash for potential changes to U.S Federal Reserve policy, but is that the real underlying reason?
Yes, the EUR/USD can trade lower, but from a risk/reward scenario, bullish speculators may believe there is more room to the upside compared to the downside which can be attained. This consideration certainly goes against the one-month trend the EUR/USD has demonstrated, so traders who seek long positions need to seriously contemplate their risk-taking choices.
Buying the EUR/USD as it moves near its current lower values may feel extremely dangerous, but if the Forex pair is able to sustain some slight momentum higher, perhaps it will be an opportunity to buy into an emerging short-term trend. Traders should wait for the EUR/USD to bypass in an upwards direction the current resistance levels near the 1.18050 to 1.18100 junctures and consider placing limit orders to go long the EUR/USD in order to seek higher values. The EUR/USD has been choppy and this may continue, so traders also need to use their stop loss ratios correctly.
EUR/USD Short-Term Outlook:
Current Resistance: 1.18050
Current Support: 1.17910
High Target: 1.18190
Low Target: 1.17780
