{"id":15562,"date":"2022-10-19T06:27:52","date_gmt":"2022-10-19T06:27:52","guid":{"rendered":"https:\/\/www.xtreamforex.com\/?p=15562"},"modified":"2022-10-19T06:27:52","modified_gmt":"2022-10-19T06:27:52","slug":"the-contrarian-case-for-a-eur-usd-rally-if-rates-can-break-above","status":"publish","type":"post","link":"https:\/\/www.xtrememarkets.com\/MU\/the-contrarian-case-for-a-eur-usd-rally-if-rates-can-break-above\/","title":{"rendered":"The Contrarian Case for a EUR\/USD Rally if Rates Can Break Above"},"content":{"rendered":"<h1>The Contrarian Case for a EUR\/USD Rally if Rates Can Break Above<\/h1>\n<p>It\u2019s not particularly hard to make a bearish case for the <a href=\"https:\/\/www.xtrememarkets.com\/mu\/\"><strong>European economy<\/strong><\/a>, especially relative to the US.<\/p>\n<p>Between a war in it\u2019s backyard, energy shortages, and an imminent economic recession, it would be hard for the outlook for the Eurozone to look much darker. The fact that the Eurozone\u2019s headwinds are so apparent and well-known suggests that there\u2019s at least a chance that they are already factored into the current market prices.<\/p>\n<p>Meanwhile, traders are pricing in a terminal Fed Funds rate of nearly 5.0% for next year, and it would take a concerted chorus of hawkish comments from the Fed to raise that projection further in the near term. With the month\u2019s major US data behind us, the market may shift its attention elsewhere over the next two weeks, potentially leading to consolidation or a correction in the greenback.<\/p>\n<p>IF we do see a counter-trend rally in the world\u2019s most widely-traded currency pair, the key area to watch will be in the 0.9950-1.0000 zone, where the top of the bearish channel, the declining 50-day EMA, and key psychological resistance at parity all converge. If we do see a break above that key resistance confluence, it would confirm a higher low and higher high on the daily chart for the first time in 18 months and point toward an extended bounce toward the mid-September highs near 1.0200 or even previous-support-turned -resistance in the 1.0350 area.<\/p>\n<p>Of course, the more logical outcome is that the <a href=\"https:\/\/www.xtrememarkets.com\/mu\/market-news\/\"><strong>EUR\/USD<\/strong><\/a> bounce peters out quickly, as previous bounces have consistently for the past 18 months, and the single currency continues its relentless march lower as we march toward November.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Contrarian Case for a EUR\/USD Rally if Rates Can Break Above It\u2019s not particularly hard to make a bearish case for the European economy, especially relative to the US. Between a war in it\u2019s backyard, energy shortages, and an imminent economic recession, it would be hard for the outlook for the Eurozone to look<\/p>\n... <a href=\"https:\/\/www.xtrememarkets.com\/MU\/the-contrarian-case-for-a-eur-usd-rally-if-rates-can-break-above\/\">continue reading<\/a>.","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[144,94,20,265,187,161,296,19,164,201],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v16.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>The Contrarian Case for a EUR\/USD Rally if Rates Can Break Above<\/title>\r\n<meta name=\"description\" content=\"It\u2019s not particularly hard to make a bearish case for the European economy, especially relative to the US.\" \/>\r\n<link rel=\"canonical\" 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