EUR/USD Forecast – Euro Attempts a Bounce Waiting for Powell

EUR/USD Forecast Video for 27.07.23

Euro vs US Dollar Technical Analysis

The euro has rallied a bit during the trading session on Wednesday as we wait for the Federal Reserve announcement later in the day. That being said, the market did stabilize a bit during the Tuesday session, so the bounce was something that could have been expected. After all, we sold off quite drastically after a massive move higher. The question now is whether or not the Federal Reserve will send the US dollar lower, or if they will be hawkish enough to send this pair running toward the greenback. Ultimately, the overall long-term trend is bullish, so it does make sense that we would see some type of recovery but we have to wait until the dust settles after the announcement to make that assessment.

All things being equal though, it does look like the market is probably going to try to go to the 1.1250 level. The 1.1250 level opens up the possibility of a move to the 1.15 level over the longer term, but keep in mind that there will be a lot of cautious trading out there during the day. However, if we were to turn around and continue to fall apart, the first thing they need to pay attention to is the bottom of the candlestick from Tuesday, which should be somewhat supported. After that, we have the 50-Day EMA which sits just below the 1.10 level, and of course there is a bit of psychology around that figure anyway.

At the end of the day, I do think that we continue to go higher, or at least sideways. That being said, the Federal Reserve will give way to the European Central Bank in less than 24 hours later, so I think that might make the reaction somewhat muted. After all, we will have to pay attention to what the Europeans are going to do, which is still a bit of an open question. Ultimately, I think we’ve got a situation where you will have to be very cautious, but the overall uptrend is still very much intact in this market, and it does take quite a bit to change the trend in the Forex world.

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