EUR/USD Forecast – Euro Breaks Below 200-Day EMA

EUR/USD Forecast Video for 11.12.23

Euro vs US Dollar Technical Analysis

The euro initially plunged during the trading session on Friday, breaking below the 1.0750 level, but it looks like there are a few buyers underneath there to try to support the market. That being said, the market is likely to continue to see a lot of noisy behavior, and therefore it’s difficult to jump in with the huge position.

The 1.07 level underneath could be the next target, assuming that we continue to sell off. All things being equal, that would wipe out the mass of bullish candles from a couple of weeks ago, which is a very negative turn of events. On the other hand, if we rally from here, then it’s possible that the market could go looking to the 1.08 level above.

In general, this is a market that’s going to use the bond market as a place to get its cues, with the US bond yields rising in falling causing momentum. Ultimately, if the bond yields in the United States continue to fall, that could help the euro, at least in theory. However, recently we have seen a different take on falling bond yields, the fact that perhaps we are all heading into a massive recession. If that’s going to be the case, then it makes the US dollar a little more attractive as people will be buying safety, meaning buying bonds. In other words, it is completely jumbled up at the moment and I think we will continue to see a lot of confusion.

It’s worth noting that the jobs number in the United States came out a little hotter than anticipated, so that has traders looking at the US dollar is a little safer than the euro, as the European Union is essentially in a recession already. Ultimately, I think this is a market that will continue to be very noisy, but that’s probably something that you can say about most markets in general right now. Furthermore, we are heading into the holiday season, which of course will sap liquidity directly out of the market. With that being the case, the market is likely to continue to see a lot of questions asked of it, and therefore you need to be cautious with the position sizing between now and the beginning of next year.

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