EUR/USD Forecast – Euro Continues to Bounce Around

Euro vs US Dollar Technical Analysis

While taking a look at the Euro against the US dollar, it’s obvious that the Euro continues to tread water overall, as we have seen a lot of sideways action. Ultimately, I think this is a market that is being influenced by a couple of technical indicators to begin with, which would be the 50 day EMA and the 200 day EMA indicators. Both of those indicators typically will cause a bit of noise so this would not be a huge surprise if we simply bounce around them. Regardless, this is a market that seems very sideways more than anything else.

It’s probably worth noting that the 200-day EMA sits right around the 1.08 level, which in and of itself has a certain amount of psychology as it is such a big round figure. Nonetheless, I also recognize that both central banks have their part to play in what’s going on, as both are likely to loosen monetary policy later this year. If that’s going to be the case, then there’s no real advantage to owning one currency over the other.

Furthermore, you also have to keep geopolitics in the back of your mind, and while the Euro isn’t necessarily what I would call a risky currency, if we do have a lot of risk off behavior, the US dollar is generally what people run to, or perhaps I should say the US Treasury market, which of course takes US dollars. As we are basically in the middle of a larger consolidation area, there isn’t a whole lot to do in the Euro, but one thing that I do use this market for is an idea as to what’s happening with the dollar elsewhere.

If the euro is falling against the dollar, generally you want to buy the dollar against other currencies. So, at this point the pair has become a bit of an indicator more than anything else. Nonetheless, we have a larger range between 1.07 on the bottom and 1.10 on the top. And if we were to get close to one of those two levels, then you may have a tradeable event.

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