EUR/USD Forecast – Euro Attempts to Recover
EUR/USD Forecast Video for 18.09.23
Euro vs US Dollar Technical Analysis
The euro has initially tried to rally a bit during the trading session on Friday, but it still looks like the market has much further to go, as there seems to be a serious lack of momentum. Because of this, the market is very likely to continue seeing downward pressure, and at this point I think the Euro has undoubtedly switched to a very bearish market. The channel that the market has been broken through, and now it is clear that the euro is suffering at the hands of the ECB. After all, the ECB raised interest rates on Thursday, but then sounded very much like a central bank that was done with monetary tightening.
On the other hand, the Federal Reserve is probably still good for at least one interest rate hike and has been steadfast in its statement to get inflation down to 2%. The market would more likely than not will continue to see more of a “fade the rally” type of situation. The size of the candlestick on Thursday was very negative, and these types of candlesticks don’t necessarily happen in a vacuum. If you look at the trend that we are in now, the biggest candlesticks were all negative.
The 1.05 level underneath is a large, round, psychologically significant figure, and people will be paying close attention to it. I think it makes a nice juicy target right now, but it doesn’t necessarily mean that we get there right away. After all, the pair is very typically choppy, and I don’t see that being any different right now. However, we have seen a significant breakdown over the last couple of months, and then the last couple of weeks certainly looks extraordinarily negative and confirmation all is well.
It’s not until we break above the 200-Day EMA that I could even think about the idea of going long of this pair, and quite frankly I think that would take a huge change in attitude coming out of the ECB and the Federal Reserve to make that happen. Interest rates continue to climb, at least in the bond market, and that makes owning the US dollar an asset much more attractive.
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