- Euro continues to weaken against the US Dollar
- Gaussian Channel creating great short opportunities
- The Euro could reach parity against the dollar
The Euro has weakened against the dollar since the beginning of 2021, with lower lows printed consecutively on the daily chart. Prices have retraced to the 50 Exponential Moving Average (EMA) countless times giving excellent short opportunities for bears.
As the currency continues to lose value, we could expect the Euro to reach parity and test the 1.0000 psychological level very soon, with only a 0.7% drop needed to break below that critical level.
Bearish Sentiment On the Hourly Chart
If we look at the shorter-term hourly time frame, the Euro has been consolidating for over a month, often finding support at the point of control line for the fixed range volume profile.
However, a key level can only be tested so many times before it eventually breaks, and we see that playing out today. As prices have no support until the critical level of 1.0000 is reached, it’s a high probability we will see the Dollar rally against the Euro, causing the bearish momentum to continue.