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EUR/USD Forecast – Euro Continues to Grind Away Against The Dollar

By:
Christopher Lewis
Updated: Feb 27, 2024, 13:19 GMT+00:00

The euro continues to rally slightly but continues to see a lot of noisy behavior and a serious lack of momentum. That being said, the market looks as if it wants to be in a range going forward.

In this article:

Euro vs US Dollar Technical Analysis

During the early hours of Tuesday, we have seen the Euro grind a bit higher against the US dollar, showing signs of life, but still facing a lot of noise just above. The 1.09 level above is a significant barrier that we need to overcome to continue going to the 1.10 level.

Short-term pullbacks could find plenty of support, not only at the 50-day EMA or perhaps even the 200-day EMA. With that being said, the market is likely to continue to be very noisy, but that’s fine. That’s a choppy euro against the US dollar that is more often the case than not, if you look back historically.

As things stand right now, the 1.07 level is likely to be your floor with the 1.10 level above being in your ceiling. All things being equal, this is a market that is essentially in the middle of it, and therefore I think you have to look at this as a scenario that as we approach fair value, it could get even noisier, and it could even be more of a grind than what we’ve seen previously.

Both central banks are likely to see the need to cut interest rates this year, so I think you are going to eventually find some type of consolidation range that this pair spends most of the year in. Remember, the euro is one of the slower moving major currencies anyway, mainly because it’s liquid, and therefore, that’s why you see such a slight spread. Looking for huge moves in the euro is a bit much.

And that’s going to be especially true this year as both central banks look very similar. Furthermore, you have to keep in mind that the European Union has to deal with Germany being in a recession. So they will almost certainly have to act and perhaps even more aggressively than the Federal Reserve. But at the end of the day, the interest rates in both of these areas are going to be coming down.

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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