EUR/USD Forecast – Euro Continues to Bounce Around in a Range

Euro vs US Dollar Technical Analysis

The Euro fell early during the trading session on Tuesday, as it looks like, traders are now starting to focus on the idea of the European Central Bank cutting rates, at least for the moment. However, if they do not cut rates this week, it might surprise the markets, at least temporarily.

There has been a significant rush to safety across the Forex world during the early hours, as we have even seen the Japanese yen pick up quite a bit of strength. That being said, none of this changes anything. We are still in an environment where we are essentially going back and forth and consolidating in the euro between 1.08 on the bottom and 1.09 on the top.

True, we did break above 1.09 momentarily, but that was turned right back around. It looks as if we are heading towards the middle of this consolidation area again, which tells me we just don’t have anywhere to be. Summertime can be somewhat slow in the markets, and that might be what we’re setting up for, just a very slow, choppy, sideways, tight range summer. This is actually quite normal for the currency markets.

Both the ECB and the Bank of Canada are expected to cut this week, and the Federal Reserve is still a bit of a mixed picture, although recently economic numbers have suggested that perhaps they will have to be cutting sooner rather than later. But at this point, they still remain data-dependent, at least according to what they say. With this, I’m very neutral in this pair.

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