EUR/USD Forecast – Euro Continues to Consolidate

Euro vs US Dollar Technical Analysis

You can see that we did pull back just a bit only to turn around and show signs of positivity again. At this point the market looks like it’s ready to continue consolidating and therefore I think you have to look at this through the prism of a market that is probably going to continue to bounce around between 1.09 and 1.10.

The 50-day EMA underneath will continue to offer a support level that a lot of people will be paying attention to, and therefore it is worth marking on your chart. If we were to break down below the 50-day EMA, it opens up a move down to the 200-day EMA, possibly even as low as 1.07, which is the bottom of the overall consolidation. This is a market that has been very reliable in the sense that the pair has obeyed the idea of boundaries.

I do look at the 1.10 level above as a bit of a ceiling, and if we were to break above it, then the market could really start to take off, perhaps trying to get to the 1.11 level, and then eventually the 1.1250 level. Keep in mind that this pair has a couple of central banks that are likely to cut rates later this year, and therefore I think you have a situation where traders will continue to look at this through that prism and therefore we probably just go back and forth most of the year.

We’re just above the middle of the short-term range that I have been paying attention to, so I think we’re slightly bullish, but I’m not necessarily looking for big moves at this point. Also, keep in mind that the Federal Reserve has an announcement in the middle of the week and that of course is going to play havoc with the dollar itself.

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