The Euro has rallied a bit during the trading session on Tuesday, reaching towards the 1.19 level yet again. This is an area that should continue to cause quite a bit of trouble, simply because it is a large, round, psychologically significant figure and of course an area that seems to extend towards the 1.20 level above, an area that is going to be crucial on longer-term charts. If we were to break above the 1.20 level, that would change things in a very drastic way. However, it is starting to show signs of exhaustion and failure, so I do think that it is likely the Euro pulls back a bit.
EUR/USD Video 16.09.20
To the downside, the 1.17 level underneath should be a massive support level, not only due to the fact that it has been in the past, but it is also where the 50 day EMA is currently trying to cross. Ultimately, if we were to break down below there then the Euro would more than likely collapse another 200 points. At the 1.15 level, I think there is even more support just waiting to happen, so pay attention to that level as well. With that, I believe that the entire uptrend would be threatened on a breakdown below that level.
However, if we were to break above the 1.20 level on a daily close, it is likely that the market would go looking towards the 1.25 handle. That is the longer-term target of a lot of fund managers, and therefore it is very likely that we could at least try to make it there, but this will require more noise coming out of the Federal Reserve.
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