EUR/USD Forecast – Euro Continues to Chop Back And Forth

Euro vs US Dollar Technical Analysis

The euro fell during the early hours of Wednesday as we continue to see the same consolidation that we have had for some time now. It is hard to imagine a sudden shift in reality and momentum, but it is possible with the announcements coming.

The 1.09 level above continues to offer resistance while the 1.08 level underneath continues to offer support. It appears that traders are coming to grips with the idea that both central banks could be cutting rates this year, and therefore they are trying to determine if there’s going to be any type of surprise.

Thursday does feature an ECB meeting, so expect a lot of volatility, but at the end of the day it’s likely that the central bank won’t shock anyone and will end up directly in this range again. The ECB is either going to cut rates or suggest that a rate cut is coming soon. As far as the Federal Reserve is concerned, they’re now starting to try to price in the Fed funds futures markets at least an interest rate cut in November. We’ll see.

This has been the game we’ve been playing for two years now. But as things stand right now, it looks like the market is prepared to go back and forth and simply kill time. That’s not uncommon with the Euro, so I think we’re basically stuck in this 100 point range for the time being. If we break out of it on a daily close, then I will simply follow the market.

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