EUR/USD Forecast – Euro Awaits Inflation Numbers

EUR/USD Forecast Video for 11-01-2024

Euro vs US Dollar Technical Analysis

The Euro has risen slightly against the dollar during trading on Wednesday, but we are still stuck in the same range that we have been in right around the 1.0950 level. Ultimately, this is a market that I think the 1.10 level above is your major resistance, while the 50-day EMA below is your major support, at least in the short term. Regardless, I think that we do have a lot of noise ahead of us and therefore we need to be very cautious about position sizing, and of course hanging onto a position for far too long as this market is likely to be very noisy as we try to sort out what’s going to happen with the US dollar. In fact, I think this has more to do with the US dollar than the Euro itself.

As we wait for more economic data, it’s very unlikely that this market truly takes off, especially as we have the consumer price index in the United States coming out on Thursday and the producer price index coming out of the United States on Friday. This will give us an idea as to how inflation is rolling through the economy, as there seems to be a lot of questions asked about the Federal Reserve and its monetary policy for 2024. With that being said, the market is likely to continue to pay close attention to the bond market.

While the dot plot of the last meeting suggested that there could be three cuts, Wall Street is trying to price in six. Somebody somewhere is wrong, and the inflation information might give us an idea as to who that is. Ultimately, we are in a very sideways market in the short term, but overall, we have been very bullish for quite some time, going back to basically the end of September of 2023. If we can rally and break above the 1.10 level, then I think the 1.1150 level is possibly a target. After that, the 1.1250 level, while breaking down below the 50-day EMA opens up the 200-day EMA as a potential target for the sellers, followed by the 1.0750 level.

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