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EUR/USD Forecast – Euro Continues to Grind

By:
Christopher Lewis
Published: May 21, 2024, 12:49 GMT+00:00

The euro has continued to grind against the US dollar, as we are still looking at the area between 1.09 and 1.10 as a result of the two central banks both looking likely to cut rates sooner rather than later?

In this article:

Euro vs US Dollar Technical Analysis

The euro has rallied slightly during the early hours on Tuesday as we continue to see a lot of noisy behavior. Ultimately, this is a market that looks like it’s trying to get to the 1.09 level, an area that should offer a certain amount of resistance.

If we can break above 1.09, then it’s possible that we could go looking to the 1.10 level. After that, short term pullbacks almost certainly attract a certain amount of support, especially near the 1.08 level where the 200 day EMA and the 50 day EMA both start to come back into the picture as potential support. Either way, you have to be very cautious with this pair as far as getting huge positions going, because quite frankly, both central banks here are expected to cut sooner or later.

But I am of the opinion that the Europeans will cut sooner. So, I think the upside is somewhat limited. I expect a lot of back and forth and choppy behavior in this pair more than anything else. In general, this is a great way to measure whether or not we are very positive on the dollar or negative on the dollar. It is, in fact, a proxy for the US dollar index. Because of this, I always pay a certain amount of attention to this pair regardless of what it is I am trading. If you get the U.S. dollar correct, you can generally get most other markets correct. I remain somewhat neutral in this market at the moment.

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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