EUR/USD Forecast – Euro Continues to See Overhead Pressure

Christopher Lewis
Updated: Feb 19, 2024, 15:59 GMT+00:00

The euro has rallied slightly during the course of the trading session on Monday, but it’s worth noting that it was Presidents’ Day in the United States, therefore it’s likely that we continue to see a lot of hesitation.

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Euro vs US Dollar Technical Analysis

The Euro initially rallied during the early trading hours on Monday, but it looks like the 200 day EMA above is going to continue to see a lot of noise around it. If we can break above there, then we could go looking to the 1.09 level. This is an area that features a lot of congestion, so I don’t think it would be easy to slice through there without some type of fundamental shift in either economic indicators or some type of major “risk on scenario.”

All things being equal, this is a market that I think has plenty of noise right around here. So I would anticipate that it is more likely than not going to be a scenario where there will be a lot of choppiness. Underneath we have the 1.07 level as support and if we were to break down below there, it’s likely that we could drop down to the 1.05 level. In general, this is a situation that I think you have a lot of noise due to the fact that both central banks are likely to need to loosen monetary policy.

So, with both of them being that way, it really doesn’t provide a huge advantage later this year unless we have some type of monetary crisis or even just something along the lines of a global slowdown, then that favors the US dollar. If we do break to the upside, 1.10 above is going to be a significant resistance barrier. If we break down below, then I think 1.05 would be difficult to get through. And the only way that we break down below the 1.05 level, is if there’s some type of serious financial crisis, the US dollar was really starting to spike like that. So pay close attention to this pair, if for no other reason than the idea that it gives you an idea of what the risk appetite is like out there.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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