EUR/USD Forecast – Euro Continues to Attempt Recovery
EUR/USD Forecast Video for 20.09.23
Euro vs US Dollar Technical Analysis
The euro rallied again during the trading session on Tuesday, as we continue to see a lot of volatility in the US dollar itself. With the FOMC meeting on Wednesday, it does make a certain amount of sense that we may see traders flatten out short positions, they will have to worry about the volatility during the announcement, and of course the press conference. After all, while the market is not expecting anything along the lines of an interest rate hike, at least not this week, the reality is that it is likely that we could see the statement play out more importantly than the actual interest rate decision itself. Furthermore, the market does believe that eventually the Americans will raise interest rates again, but right now it looks like the question is whether or not they will stay tight for longer.
Just above, I anticipate that the 1.08 level is an area that will be very difficult to overcome, especially now that we have the 200-Day EMA hanging about that same level. If we can clear that, then it’s likely that we could go much higher. However, on signs of exhaustion I think this is a market that will continue to struggle and go lower overall, as we have so much in the way of US dollar strength and of course interest rates continue to rise, albeit slightly. All things being equal, you need to pay close attention to the short end of the yield curve, because that’s a lot of where you will see the action play out.
On a breakdown below the lows of the Thursday candlestick of last week, that opens up an attack on the 1.06 level, and then possibly down to the 1.05 level. I would not be surprised at all to see this, but we will have to wait and see how this plays out. With that being the case, I think you have to look at this as a potential shorting opportunity, but with the noise coming out of Washington DC on Wednesday, it’s also possible you may have to wait until the end of the Wednesday session to put any real money to work.
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