EUR/USD Forecast: December 2021

Do not be surprised at all to see some type of massive bounce higher during the month of December, but I think that is only going to be a selling opportunity.

The euro has been struggling for a while now, and at this point it is difficult to imagine that December is going to be any better. This is a market that I think will continue to see a lot of negativity, but we have gotten so oversold that a bit of a bounce would not be a huge stretch at all. The market almost certainly will try to recover sometime during the month of December, but with the Federal Reserve likely to continue tapering, it does make sense that we would see the US dollar continue to be a beneficiary.

Looking at this chart, I believe that the 1.14 level will be resistance, so any move towards that area I would be looking to short. Furthermore, if we can see some type of exhaustive-looking candlestick, that would also be helpful, as the market clearly has made up its mind for the time being. Ultimately, this is a market that will continue to see a lot of noisy trading, but I think we will eventually go looking towards 1.10 level.

That being said, the 1.10 level could be attempted sometime during the holidays, because the lack of liquidity continues to be a significant issue that people will be paying close attention to. After all, at the end of the year a lot of traders out there have to do some type of business, meaning that they have to close out year-long positions. Keep in mind that the closer we get to Christmas and New Year’s Day, the more likely we are going to see a lot of reckless volatility in this market. Do not be surprised at all to see some type of massive bounce higher during the month of December, but I think that is only going to be a selling opportunity as the longer-term fundamentals almost certainly help the idea of the US dollar strengthening against the euro, which has essentially been a punching bag for quite a few currencies, especially the US dollar. That being said, I do not really have a scenario in which I am willing to buy this market, at least not at this point. In general, this is a market that I think will continue to see opportunities on signs of exhaustion.

1 2
View single page >> |

Disclosure: DailyForex will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.