EUR/USD Forecast – Euro Continues to Consolidate

Christopher Lewis
Published: Apr 24, 2024, 13:03 GMT+00:00

The euro pulled back from the crucial 1.07 level, an area that has been important more than once at this point.

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Euro vs US Dollar Technical Analysis

The Euro was initially trying to break above the 1.07 level early during the trading session on Wednesday but has since given back those upward movements and has shown signs of hesitation. This does make a certain amount of sense, as I would anticipate a little bit of market memory here.

1.07 is an area that previously had been significant support, so now should, at least in theory, be significant resistance. Furthermore, both central banks are likely to be cutting rates sooner or later, but the European Central Bank is likely to do it sooner than the Federal Reserve. And I think that is a lot of what we are seeing here.

With that being the case, I like the idea of fading short term rallies, but I also recognize that this pair is notoriously sideways most of the time. This is without a doubt one of the worst pairs of trade, probably because of the efficiency. With that being said, it is a good gauge on US dollar strength or weakness, and it looks like the US dollar is at least trying to strengthen a little bit during the trading session.

So, with that in mind, you may extrapolate some of this information into other pairs that you trade. If we do fall from here, the 1.06 level would be the significant support that we bounce from. But if we break higher, then you have to pay attention to the 50 day EMA, which happens to sit right around the 1.08 level, which in and of itself has a certain amount of psychology attached to it.

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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