EUR/USD Forecast – Euro Continues to Grind Slightly Higher

Euro vs US Dollar Technical Analysis

Taking a look at the euro against the US dollar, you can see that we are hanging around the 200 day EMA which is also at the 1.08 level. This large round figure will attract a certain amount of attention but what I’m drawn to is the price action on Tuesday, which had seen the euro surge to the 50 day EMA only to give that up.

It looks to me like the market is just simply hanging around the 200 day EMA and trying to figure out what to do with itself. And underneath we have the 1.0750 level as a bit of a fulcrum for price. And you should keep in mind that from that level down to the 1.07 level, we have seen fierce support. So at this point in time, it looks like we don’t really have a ton of momentum to the upside. But even if we do continue to find momentum, it’s likely to encounter a lot of problems. With that being the case, we have to look at this as a market that may be trying to settle into some type of range. And I do think that 2024 is going to be a year that sees a lot of range bound trading. And this is mainly due to the fact that central banks around the world are likely to start cutting rates.

The Federal Reserve and the European Central Bank most certainly will be two of them, and that keeps both of these currencies a little lackluster. With that being said, I think you have to look at this through the prism of short-term back and forth trading, and if you are a range-bound trader on lower timeframes, then it’s very likely this will be a good pair for you. You can see, simply put, on the daily chart, it’s just not open enough to make big moves without some type of major fundamental announcement or action happening.

Right now, we just don’t have it. So, while we could grind higher, the keyword would of course be grind, and I think 1.09 will be a difficult barrier to get above. If we were to turn around and break down below the 1.07 level, that opens the door to significant selling in what would probably be a pro-US dollar move across the board.

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