EUR/USD Forecast – Euro Bounces From the 50-Day EMA

EUR/USD Forecast Video for 31.07.23

Euro vs US Dollar Technical Analysis

The euro initially broke down below the 50-Day EMA during the trading session on Friday, but turned around to show signs of life. By showing resiliency underneath the 50-Day EMA, the market looks as if it is going to try to continue the uptrend, despite the fact that the Thursday candlestick was so negative after the European Central Bank announcement.

If we can break above the top of the Friday candlestick, then it’s possible that the euro will go looking to the 1.11 level. All things being equal, we are very much in an uptrend, and therefore it’s worth paying attention to when we get some type of bounce, as it opens up the possibility of a move to the highs again, near the 1.1250 level. 1.1250 level has been significant resistance previously, and if we were to break above there, then the euro is likely to looking toward the 1.15 handle.

On the other hand, if we were to break down below the 1.09 level, then we could test the 200-Day EMA, which of course is a massive indicator that a lot of people pay close attention to and of course dictates the overall trend. If we were to break down below there, then it opens up the possible downtrend kicking off, but I think at this point it’s obvious that traders are still assuming that the Federal Reserve will have to loosen monetary policy down the road, and therefore I think we will continue to see a lot of noisy behavior.

All things being equal, you will have to ride through a lot of volatility, as there is so much in the way of indecision. With this being the case, keep your position size reasonable but it certainly looks as if the market is trying to bounce a bit, and perhaps trying to take off to the upside over the longer term. Regardless, it’s going to be very noisy, and therefore it’s worth noting that the market is one that you have to approach with caution as the uncertainty will continue to be a major problem in general.

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