EUR/USD Forecast – Euro Continues to Consolidate

EUR/USD Forecast Video for 31.10.23

Euro vs US Dollar Technical Analysis

The euro went back and forth during the trading session on Monday, as we continue to see a lot of questions asked about the 1.06 level. Ultimately, this is a market that has been forming a bearish flag for a while, and therefore we continue to walk right along the uptrend line that makes up the bottom of this flag. All things being equal, this is a market that is still very bearish but does look as if it is trying to hang on to some semblance of support.

A short-term rally at this point is certainly possible but is probably going to run into a plethora of issues above. From a technical analysis standpoint, the 50-Day EMA currently sits right around the 1.0650 level and is dropping, perhaps offering a short-term ceiling. Furthermore, we have seen a lot of resistance in the 1.07 level, so somewhere in that area one would have to assume that the sellers will come back out to defend the US dollar.

If we break down below the bottom of the flag, that could kick off a move to the 1.05 level underneath. If we break down below the 1.05 level, then the market is going to continue to go much lower. In that scenario, we could have a “measured move” down to the 1.01 level or so. Regardless, the market is likely to continue to go lower due to the fact that there are a whole host of reasons the US dollar should strengthen. The geopolitical concerns coming out of the Middle East alone could drive the US dollar higher, but we also have higher interest rates out there making it a much more attractive currency as well.

All things being equal, this is a market that I have no interest in buying until we can break well above the 1.07 level, which also features the 200-Day EMA reaching toward that area as well. Regardless, this is a market that continues to struggle overall, so I will have to look at any rally at this point in time as a potential selling opportunity, giving you an opportunity to pick up “cheap US dollars” going forward.

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