The EURUSD Is Down 4.5% In July: Time To Sell?

The EURUSD Is Down 4.5% In July: Time To Sell?

The dollar index is trading at levels last seen in a bull market in 2000, and July 2022 is coming up to a climb of 4%. 

How has this impacted the currency pairs on my watchlist? I will look at the various pairs in individual articles, starting with the euro-U.S. dollar pair. 

The EURUSD has fallen 20% since January 2021. The euro has declined 4.5% against the U.S. dollar this month, taking the price out of an area of consolidation in which it has been trading since March 2015.

As the saying goes, the longer the consolidation, the bigger the breakout. This move to the downside this month could be significant for further weakness and a profitable period in the market for short sellers. 

It is now a question of timing for an entry as well as projecting forward and looking at how far the price could weaken. 

Below is the daily time frame. 

The price is faced with a significant support level in the form of the 1.0000 round number. This level could force the bulls to come in and push the price back up into the above-mentioned area of consolidation. 

This move to the downside could be a fake breakout, where jumping in too early could lead to losses. Applying patience and allowing high-probability environments to appear is very much a virtue.

If the 1.0000 level is broken and confirmed as resistance, we could see the price weaken toward the current low from 2000 at 0.8000. 

The EURUSD is on my watchlist, but I am standing aside until the bears confirm a clear market direction below the 1.0000 round number. 

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