EUR/USD Forecast – Euro Attempts to Rally Early on Monday

EUR/USD Forecast Video for 19.12.23

Euro vs US Dollar Technical Analysis

The euro rallied a bit during the trading session on Monday, as we continue to see traders reacting to the change in the “dot plot” from the Federal Reserve, as the market is likely to continue to price in the idea of interest rates dropping in the market. This drives down the value of the US dollar, and therefore by default the euro will continue to pick up momentum. The euro recently got a bit of a boost due to the ECB suggesting that they are not thinking about loosening monetary policy yet. This of course keeps the euro somewhat bullish, and therefore I think we could go looking to the 1.10 level above, an area that has been like a brick wall.

Underneath, I think the 1.0850 level is more likely than not going to continue to offer support, and therefore I would be paying close attention to it. Just underneath there is the 1.08 level, which also features the 50-Day EMA. All things being equal, the market is likely to continue to see a lot of value hunting, therefore I think each dip offers a potential buying opportunity. This will more likely than not continue to be the way going forward, and therefore I like the idea of buying on dips in order to take advantage of any value that presents itself. That being said, if we were to break down below the 1.0750 level, then it would change the trajectory.

Going forward, we could very well be trying to form some type of trading range, but right now I think it’s a little premature to worry about that. Furthermore, you also have to keep in mind that at this time of the year liquidity can evaporate, so therefore whether or not we get a big move in the near term is probably open for debate. That being said, if we were to break above the 1.10 level on a daily close, then I think it’s possible that the euro could start to take off, perhaps reaching toward 1.1250 level above, an area that has been previous resistance and a selling area.

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