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EUR/USD Forecast – Euro Attempts to Recover

By:
Christopher Lewis
Published: Sep 20, 2023, 12:58 GMT+00:00

The euro rallied a bit during the course of the trading session on Wednesday, but we haven’t gotten through the FOMC meeting yet, so this has to be taken with a grain of salt.

Euro bills, FX Empire

In this article:

EUR/USD Forecast Video for 21.09.23

Euro vs US Dollar Technical Analysis

The euro rallied a bit during the early hours on Wednesday, but we still have to get through the FOMC meeting and statement. Because of this, it looks like those who have been aggressively short the euro are trying to get out of their positions. That being said, there are still some areas just above the pay attention to, not the least of which would be the 1.08 level where the 200-Day EMA currently resides.

The 50-Day EMA looks as if it is going to cross below the 200-Day EMA rather soon, and therefore the so-called “death cross” would kick off, and a lot of technical traders will pay close attention to that. That being said, it is also near the bottom of the overall channel that we had been in previously. There should be a certain amount of “market memory” in that area, so I think it’s worth paying close attention to, assuming that we even get that far.

Keep in mind that a lot of people will be paying attention to the statement and the press conference to get an idea as to whether or not the Federal Reserve is going to continue to tighten monetary policy, and of course whether or not they are going to acknowledge the fact that the central bank might be paying close attention to the fact that inflation has dropped a bit in the United States. That being said, it is still far above where it should be, so a lot of this will come down to how the press conference goes.

Nonetheless, you also have to keep in mind that the European Union is certainly heading into a recession, so it’s a bit difficult to get overly excited about the euro at the moment. I anticipate that any rally at this point in time will end up being a selling opportunity sooner or later, but if we were to take out the moving averages and go above them, then I would have to reassess the entire situation. As things stand right now, it’s more or less looking like a market that it has a “fade the rally” set up just waiting to happen.

For a look at all of today’s economic events, check out our economic calendar.

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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