EUR/USD Forecast – Euro Continues to Consolidate Despite Cut

Euro vs US Dollar Technical Analysis

The ECB has cut rates by 25 basis points during the trading session, and then promptly stated in the press conference that they may or may not do anything ever again, so we are essentially confused at the moment because quite frankly, I think the ECB doesn’t know what it wants to do. At this point in time, we have seen a lot of volatility, but the question now comes as to whether or not we can sustain any type of momentum. Furthermore, is there a reason why the ECB would continue to cut rates, or will they have to backpedal?

There isn’t a whole lot of confidence going on in the press conference that I am listening to right now. And I think this is going to end up being a problem. We are still looking at the 1.09 level as a major resistance barrier. And if we can break above there, then we could go looking to the 1.10 level. Underneath we have massive support at the 1.08 level. And I think that is your short-term floor in the market, if you will.

And with that being said, I do think that we have a scenario where market participants probably look at this as a confused and lost market. Whether or not we can break out remains to be seen, and I will be watching to see if we make a fresh new high. If we do, then OK, fine, we go to 1.10. If we don’t, then you’ve got major issues. Ultimately, this looks like a market that we may be better off leaving loans because Friday, of course, is the jobs number, which will cause massive volatility as well.

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