EUR/USD Forecast – Euro Continues to be Rudderless

Christopher Lewis
Updated: Mar 5, 2024, 13:12 UTC

The euro has shown itself to be somewhat listless and rudderless over the last several weeks, and I think more of that is coming as we have the nonfarm payroll numbers coming out on Friday, which of course will have a major influence on momentum and of course risk appetite.

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Euro vs US Dollar Technical Analysis

During the trading session on Tuesday, we did very little in the early hours as the Euro continues to grind sideways. The 50 day EMA sits just below. And that of course will offer a certain amount of support anyway. But I really don’t think that comes into the picture. I think we’re just bouncing around in the middle of a larger consolidation area and desperately seeking some type of momentum. I don’t think we get that between now and Friday because of the non-farm payroll announcement on Friday will obviously take a lot of attention. Between now and then, I would anticipate a lot of sideways bouncing around scalping type conditions maybe if you are a short-term scalper, maybe some type of trade system that uses a stochastic oscillator, for example.

Keep in mind that the 1.07 level underneath is the major floor in the market, and the 1.10 level above is the major ceiling. As we are right about 1.0850, we’re essentially in the middle. So, with that being said, we’re at fair value, and although the interest rate markets may have their say as to where this pair goes, in general, I think you’re just kind of stuck here and I believe this year is going to be very range bound for the Euro against the dollar, mainly due to the fact that both central banks are expected to cut rates later this year, especially the Europeans who have to deal with a recession in Germany.

That’s a huge chunk of the EU economy. It’s about 82% or something last time I looked and that obviously will have its major influence on conditions on the continent. So, with that, I remain very neutral on this pair, but I also recognize that eventually we will see some type of momentum reenter the arena. If and when we do, it may set up to be one of the better trades. Whether or not that happens anytime soon remains to be seen.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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