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EUR/USD Forecast – Euro Continues to Bounce Around

By:
Christopher Lewis
Published: Feb 22, 2024, 13:44 UTC

The euro rallied significantly during the early hours on Thursday, as we continue to see a lot of noisy behavior.

In this article:

Euro vs US Dollar Technical Analysis

The Euro had a pretty wild beginning to Thursday as we rallied rather significantly to reach the 1.09 level. This is a market that I think is extraordinarily noisy, but the fact that we rallied the way we did was a bit surprising. The 1.09 level has offered a significant amount of resistance and pulling back from there does make a certain amount of sense as it would be quite extraordinary to simply slice through it. With that being the case, then the market is likely to go looking to the 1.10 level. This is an area where I expect to see a lot of noisy behavior, and of course “market memory” come back into the picture as it had been so resistance previously.

All things being equal, this is a market that could pull back towards the 200-day EMA. Underneath, we have the 1.0750 level, which is an area that a lot of people will be paying close attention to due to the fact that it is a major hard floor in the market. Keep in mind that the markets are currently trying to price in the idea of both of these central banks loosening monetary policy in 2024 and therefore you are going to have a situation where I think we’re going to carve out a range this asset for this year. Where the top is, we don’t know yet, but it certainly looks like right now, at least, the 1.0650 level underneath is the bottom.

With that being the case, you have a scenario where the market continues to be very noisy, very choppy, and it’s probably going to be all about the overall bond market situation and whether or not interest rates are going higher or lower in the United States. The ECB will of course, have a situation where they have to loosen in Europe due to the fact that Germany is already in a recession. It’s probably only a matter of time and, of course, the Fed has already said that they were going to be cutting later this year.

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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