Since the start of the Trump Rally on November 6, the euro has faced heavy selling, dropping from the low 1.09 range. Key support levels, including the 200-day moving average at 1.0870, the double top neckline at 1.0770, and the year-to-date low at 1.0601, have all been broken. Factors contributing to this include the strong dollar, political instability in Germany, and economic weakness in the eurozone.
Moreover, the stark differences between U.S. and eurozone monetary policies—reflecting the Federal Reserve’s hawkish stance and the ECB’s dovish policies—are accelerating euro selling. While this trend is expected to continue, it’s important to watch for a possible rebound, as the euro has fallen nearly 440 points in less than ten days. However, with ongoing selling pressure in other euro pairs like EUR/JPY and EUR/GBP, any recovery in the euro is likely to be limited.
This Week’s EUR/USD Predicted Range: 1.0660 (38.2% retracement)–1.0450 (2023 low)
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