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EUR/USD Forecast – Euro Continues to Consolidate

By:
Christopher Lewis
Published: Feb 29, 2024, 13:37 UTC

The euro did very little in the early hours on Thursday as we continue to see the market consolidate. This might be a microcosm of what we are going to see around the world in various financial markets.

In this article:

Euro vs US Dollar Technical Analysis

You can see that it’s been a very choppy affair all week. And of course, Thursday wasn’t any different. We are hanging around the 50 day EMA as well as the 200 day EMA. And therefore, I think a lot of systematic traders don’t really know what to do with this. When you look at this, you can see that there is a potential consolidation area and I think we are essentially in the middle of it. The 1.07 level underneath is a potential floor, with the 1.10 level above is a potential ceiling.

The central banks behind both of these currencies are likely to be cutting rates this year. And even though the ECB isn’t really mapped out the way that the Federal Reserve is, it clearly has a lot of issues when it comes to the potential slowdown. After all, Germany is already in a recession, and Germany is something like 80% of the European Union GDP.

So as long as that’s the case, I do think that regardless of what the Federal Reserve is going to do, the Euro isn’t necessarily going to take off. I think this is a pair that is going to be indicative of what we see around the world in all financial markets, that we are going to see a lot of choppy behavior. This is a pair that I think eventually will settle into this range, or something similar to it for the rest of the year. If we were to break down below the 1.07 level, then we could open up a move down to the 1.05 level. On the other hand, if we rally from here and break above the 1.10 level, then the 1.11 level, followed by the 1.1250 level, is a potential target.

At this point in time, I just don’t get excited about big moves until we get to the outside of the consolidation range that we are trying to build. The day-to-day action will continue to suit scalping more than anything else at this point in time.

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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