EUR/USD Forecast – Euro Continues to Look For Direction

Euro vs US Dollar Technical Analysis

The Euro rallied slightly during the early hours on Wednesday as we waited for the Federal Reserve. At this point, it looks like the 1.08 level will continue to be support. And I think the 1.09 level above will continue to be resistant. I think really at this point, the best thing you can do is wait to see how the day closes. If the market closes below the 1.08 level, then that is more likely than not to send this pair down about another 50 points, possibly even down to the next big figure.

If that does happen, more likely than not, you will see the US dollar strengthening against almost everything. And therefore, you would have a situation where it wouldn’t just be this chart you would be referring to. You might be looking at other currencies such as the pound or the Australian dollar, et cetera. Ultimately, this is a pair that I do think is trying to find its bottom, at least in the short term. But I would use the key phrase here, short term because the euro isn’t exactly in the mood for bigger moves, unless, of course, maybe the Federal Reserve truly shocks the market with a massive dovish statement.

We’ll have to wait and see. I don’t expect that and in fact, it wouldn’t really surprise me if the Federal Reserve hinted at cuts in the future, but no more so than we’ve seen prior to this. Beyond that, economic data in the United States continues to show signs of inflation and growth, so we may have to be somewhat cautious about predicting the death of the US dollar.

For a look at all of today’s economic events, check out our economic calendar.