EUR/USD Forecast – Euro Continues to Grind Back And Forth in Short-term Rally

Euro vs US Dollar Technical Analysis

The Euro bounced a bit early during the trading session on Monday, as we are hanging around the 200 day EMA. By bouncing here, it does suggest that perhaps the market is still doing what it can to hang around and stay in the same range that we had been in. The question now, of course, is going to be, what exactly do we have as far as momentum? Because quite frankly, that will be the thing that moves the markets more than anything else.

Ultimately, this is a market that I think is going to continue to see a lot of choppy volatility. And as we are right around the 200-day EMA, a lot of technical indicators and technical systems will have fired off for traders to get involved. With that being the case, I think you’ve got a situation that may try to run the euro up to the 1.0925 level. Above there we have the 1.10 level, which I think a lot of people would be paying attention to as well, which has been the top of the consolidation range recently. On the bottom we have 1.07, which of course is an area that has been very supported in the past, and therefore I think that’s your floor.

This year, I would not be surprised at all to see the euro end up being a little bit lackluster in its performance because quite frankly, both of these central banks have the loosening monetary policy down the road, and that will make neither currency that attractive. What I’m using this pair for is a gauge as to what’s going to happen with the US dollar when I’m trading gold, the British pound or even the Japanese yen. Occasionally I will take a trade, but I would like this pair to be closer to the 1.10 level above or the 1.07 level below before putting money to work.

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