EUR/USD Forecast – Euro Attempts to Recover Early on Wednesday

Euro vs US Dollar Technical Analysis

It looks like the Euro is going to try to bounce in the early hours on Wednesday, perhaps even trying to rally enough to fill the gap that kicked off the week. This does make a certain amount of sense due to the fact that we have a FOMC meeting late in the day. Plus, we also get CPI numbers coming out of the United States. So, it’s going to be a busy day. The Euro is a bit oversold and with that being the case, I think a return to a little bit of equilibrium at the gap, which is about 1.08, makes a certain amount of sense.

Whether or not it is a trade that you should take might be a different question altogether, but I think perhaps those who are short of the euro might be trying to get out of the market ahead of all of the dangerous noise. So, with that, I think we’ve got a situation where markets probably go looking to reach this area and then after the fundamental announcements, we’ll have to make a decision.

It does look very much like a market that is paying close attention to the 1.09 level above as a massive ceiling, the 1.08 level above as perhaps fair value, and the 1.07 level underneath as a bit of a floor. I do think we will continue to be very sideways from a longer term perspective on the euro for the rest of the summer. On the 4 hour chart though, it certainly looks as if we’re going to try to recover at least in the short term.

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