EUR/USD Forecast: Euro Tests 1.1150 Support As French Debt Concerns Fuel Selling

The euro continues to see pressure put upon it by the debt issues in the European Union, with particular influence coming out of France.

EUR/USD

The euro gapped lower to kick off the trading week and tested the 1.1150 level. That is an area that was massive support, and we bounced from there, showing signs of strength. The fact that we turned around and fell apart suggests that perhaps this is a market that is ready to eventually break down and go further to the downside.

That would make a certain amount of sense as we continue to see the never-ending French debt problems. Although interest rates in the United States are relatively high, this, I believe, has more to do with France falling apart.

I don't have any interest in buying the Euro

Rallies at this point in time I still look at as selling opportunities, with the 1.13 level as an area of significant resistance. If we could break above there, then the 1.14 level is the next area that I'm watching. If we break down from here, then I think it opens up the possibility of moving all the way down to the 1.10 level.

I don't have any interest in buying the euro, at least not until the French debt crisis gets under control and the fiscal budget is one that satiates the market's appetite for crushing the euro itself.

Furthermore, we have to keep in mind that somewhere this winter, we are going to have to be watching energy supply heading into the European Union. That is still something that could be a bit of a factor here, especially with the German industrial issues and demand.

Ultimately, this is a very negative market. I don't see that changing anytime soon. I remain bearish.