Is The Euro Really Going To Rally In 2020???

“Super” Mario Draghi, Italian economist who served from 2011 to 2019 as president of the European Central Bank (ECB), the financial institution responsible for making monetary decisions within the Euro Zone, finally passed the keys to the car to Christine Madeleine Odette Lagarde in October. But before passing the keys he lowered the deposit rate to minus 0.5%, resume quantitative easing and give banks easier terms on long-term loans.

Christine Madeleine Odette Lagarde is a French politician, economist and lawyer Lagarde was the first woman to become Finance Minister of France and is now the first woman to head the ECB.

Lagarde, who holds her first policy meeting on Dec. 12, is facing mounting pressure from banks and politicians to review other ways to increase inflation in the ECB. According to a Bloomberg survey of economists, the ECB is down with cutting interest rate and feel that monetary policy will be left alone for the next couple of years with the first predicted interest rate hike happening in the first quarter of 2022. It’s why many feel the Euro will rally in 2020.

In the most recent session, the Euro fell during the trading session on Friday, as the US jobs report was stronger than expected. The reported results in money flowing into the US dollar, which caused the Euro to reverse and go down.
So where is the Euro headed next, lets go to the charts?

Big Picture - monthly zones are like the end zones of a football field. But for trading purposes, it's about where did price stop going up and started falling and where did price stop going down and started rising. Because price has memory, the monthly zones should cause price to reverse again.

Based on the weekly chart, price is still in this downward channel. In addition, based on the moving averages, the momentum is still downward. So, I have a bias that price is heading down to the gap fill. A gap fill occurs due to a huge imbalance between buyers and sellers and usually occur due to an event or news. This gap happens to be a breakaway gap or continuation gap. All gaps get filled at some point or another as this gap is approaching the three year mark.

But it's not about what I feel, it's about what I feel and before price fill the gap...if it fills the gap, price must deal with weekly demand at 1.09300 as price has already bounce off this zone several times already. Thus, a deeper penetration of the zone is warranted at this point.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.