EUR/USD Forecast – Euro Breaks Out After ECB Statement

EUR/USD Forecast Video for 16.06.23

Euro vs US Dollar Technical Analysis

The euro rallied during the trading session on Thursday as we have broken above the 1.09 level. The 1.09 level is an area where a lot of people would be paying close attention to, and the fact that we have broken above there so rapidly suggests that the euro is ready to take off. Keep in mind that the ECB raised interest rates as expected, while the Federal Reserve paused.

Interestingly enough, Jerome Powell suggested on Wednesday that the Federal Reserve had at least 2 interest rate hikes ahead of it, so I wonder how long this will last. This is essentially going to be a lot of noisy behavior just waiting to happen, but right now it looks like we are going to make a baseline toward the 1.10 level above. Underneath, the 50-Day EMA offers support, near the bottom of the candlestick for the Thursday session. That’s an area where I would expect to see value hunters, and now that we have broken out of the previous consolidation area which was right at the 200-Day EMA and the trend line, it all comes together as a bounce in the same channel that we have been in.

Above, if we can clear the 1.10 level, it’s very likely that the market will continue to go much higher, and it could be the end of the US dollar strength for a while. That being said, keep in mind that the market will be very noisy over the next couple of days, and it will be interesting to see whether or not risk appetite comes into the picture again. If risk appetite gets crushed, then it could bring money back to the US dollar, but at this point in time it looks like we’re going to ignore a lot of negativity.

Alternatively, we are getting a little bit stretched at this point, but all things being equal, this is a market that has seen a lot of volatility in the past, and I suspect we will continue to see it in the future. With this, I believe it is probably only a matter of time before we get the pullback, but I think there will be plenty of buyers there as well.

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