EUR/USD Forecast – Euro Continues to Dance in The Same Consolidation Area

EUR/USD Forecast Video for 06.03.23

Euro vs US Dollar Technical Analysis

The Euro has rallied a bit during the trading session on Friday, but at the end of the day, it is still more noise than anything else. After all, we have a situation where the market is between the 50-Day EMA and the 200-Day EMA indicators, and that quite often causes quite a bit of volatility and noisy behavior. Algorithmic traders will be going in both directions, so therefore I think we continue to see this be very choppy and noisy going forward. However, if we can break out of this range, then it’s likely that we could have a bigger move.

It’s worth noting that recently the market had bounced all the way back to the 50% Fibonacci level, before falling again. It appears that the terminal rate being priced in buying the market coming out of the United States is going to be closer to 6% at this rate, and therefore it’s probably going to be a situation where the euro will probably lag, due to the fact that the interest rate situation in the European Union prices it at much lower.

The 200-Day EMA underneath being broken below would open up a move to much lower pricing, perhaps down to the 1.03 level, where we had seen a bounce previously. If we were to break down below there, then it’s likely that we go down to the parity level. The parity level courses a large, round, psychologically significant figure that the market will pay close attention to. If we were to break through there, then the euro will fall apart. I don’t necessarily think that’s going to happen anytime soon, but it is something that we could be looking at over the longer term.

On the other hand, if we were to break above the 1.07 level, then it could open up a move to the 1.08 level. The 1.08 level above is the beginning of massive selling pressure that started all the way back at the 1.10 level. Then we had tested the 50% Fibonacci level, but now it looks like we are ready to continue to go lower, which coincides with those 2 massive negative candlesticks above that kicked off the correction.

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