EUR/USD Forecast – Euro Breaks Down Again

EUR/USD Forecast Video for 27.10.23

Euro vs US Dollar Technical Analysis

The euro has fallen again during the trading session as we are threatening the crucial 1.05 level. The 1.05 level of course is a large, round, psychologically significant figure, and of course an area where a lot of people will pay close attention to. If we break down below there, it should bring in a flood of new selling, and it is worth noting that we are now in the midst of breaking down through the bottom of a bullish flag, which of course is a very technically negative turn of events.

Interest rates in America continue to climb, and as long as that’s going to be the case, the reality is that the US dollar will outperform the euro and other currencies. After all, the higher the interest rate, the more you get paid to hang on to that currency. With that being the case, and of course the fact that we have a lot of geopolitical risks out there, it does make a certain amount of sense that we would see the US dollar continue to be very attractive.

If we break down below the 1.05 level, then it opens up the door down to the 1.0250 level underneath. The 1.2050 level underneath of course is going to be very important to pay attention to as we have previously seen action in that area. If we break down below that level, then it opens up the very real possibility of a move down to the parity level, which of course we visited a while back.

On the other side of the equation, if we were to turn around and take out the 50-Day EMA, that would be a very bullish turn of events. While I don’t necessarily see that happening anytime soon, it does need to be kept in the back of your mind in case we do see a sudden change in attitude. At this point though, it looks like everybody’s willing to run to the greenback, and the Thursday candlestick is at least starting to show that the momentum may be picking up yet again. Short-term rallies will more likely than not continue to be faded.

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