The Euro has pulled back during the trading session on Wednesday to break down through the 50 day EMA, and perhaps reaching towards the 1.17 level. The candlestick is a bit of a hammer, and this suggests that we still have bullish pressure but that being said a lot of this is based upon the latest headline coming out of the Brexit situation as Boris Johnson suggests that the United Kingdom is going to continue to work on the Brexit deal past October 15. This shows that perhaps there will not be a “no deal Brexit”, and therefore it does help the European Union.
EUR/USD Video 15.10.20
Having said that, I still see a lot of resistance above, especially near the top of the candlestick from the previous session. The previous uptrend line is at the top of that candlestick as well, so I think it is only a matter of time before we would see sellers come back in. After all, there are a lot of concerns out there when it comes to the European Union as the economic numbers are getting worse, and of course the ECB is likely to step in and start doing more stimulus or some other type of quantitative easing measure given enough time.
With this, I am looking for short-term candlesticks to show signs of exhaustion in order to start selling again, but I do recognize that the market will continue to be very choppy to say the least. If we break above the uptrend line marked on the chart, then the 1.1850 level gets tested, followed by the 1.19 level and the 1.20 level.
For a look at all of today’s economic events, check out our economic calendar.