EUR/USD Forecast – Euro Bounces Back Into Familiar Area

EUR/USD Forecast Video for 19.04.23

Euro vs US Dollar Technical Analysis

The euro rallied a bit during the trading session on Tuesday as the market continues to probe the ability to go higher. The 1.10 level above is a large, round, psychologically significant figure, and therefore it will attract a certain amount of attention. If we were to break above that level, then it’s possible that the market could start to take off again, perhaps going to the 1.1250 level.

On the other hand, if we were to turn around and break down below the 1.09 level, then it’s possible that we could go down to the 50-Day EMA, which is sitting right around the 1.08 level. The 1.08 level is an area that has been important multiple times, and of course a lot of headlines will be made if we test that area. If we were to break down below there, then I think you have a real shot at falling down toward the 200-Day EMA, which is currently sitting just around the 1.06 level.

Keep in mind that there are a lot of questions as to whether or not the Federal Reserve will start to loosen monetary policy, and that is part of why the euro has seen so much in the way of strength recently. However, there are a lot of economic concerns out there right now, and you need to be cautious about the economic performance of most major economies. After all, it looks as if we are heading into a recession, and that typically bodes well for the US dollar eventually.

We are essentially working with 2 major themes here, the idea that the Federal Reserve is going to slow down, and the idea that we are going to see a slowing global economy. Typically, what will happen from a historical point of view is that the US dollar takes it on the chin initially, but then starts to strengthen as people race toward safety. Regardless, I think the thing that you can probably count on in this market is going to be a lot of choppy behavior in the short term going forward, with a lot of concerns with both economies going forward, and therefore a lot of money will be flowing into the bond markets.

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