EUR/USD Forecast – Euro Continues Its Sideways Grind

EUR/USD Forecast Video for 31.01.23

Euro vs US Dollar Technical Analysis

The Euro has rallied a bit during the trading session on Monday, as we continue to see the 1.09 level offers significant amount of resistance. This is an area that has been important in a couple of times, so it should not be too big of a surprise that we are struggling here. That being said, I also believe that we are in a situation where most traders are sitting on the sidelines and waiting to see what the Federal Reserve has to say on Wednesday. This will have a huge influence on what happens next, so I’d be surprised to see if we had a move between now and Wednesday afternoon.

However, it’s probably worth noting that we are a little overstretched, so we could even see a bit of a pullback ahead of time, if for no other reason than to mitigate some of the risks involved with shorting the US dollar into such an important news event.

If we do take out the 1.09 level handily, then the 1.10 level followed by the 1.11 level will be targeted. On the downside, I think the biggest amount of support that I can see on the chart right now is somewhere near the 1.06 level, especially as the 50 day moving average is starting to solidify that area as well. Ultimately, I think this is a situation where you have to look at this through the prism of being a little overstretched, but if the Federal Reserve does give in to the markets and starts to sound more dovish, that might provide more of a rocket fuel type launch from here.

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