EUR/USD Forecast – Euro Continues to Recover on Tuesday

Euro vs US Dollar Technical Analysis

We rallied a bit during the trading session on Tuesday, reaching towards the 50-day EMA. The 50-day EMA, of course, is an area where a lot of people are going to be paying close attention to, and therefore, I would not be surprised to see a little bit of noise in this area. After all, this is a situation where we don’t have much in the way of economic news to move the markets.

So, I think we’re just going to kind of go back and forth in this area, at least until Thursday or Friday when we start to get a little bit more important economic fundamental news. The market is near the 1.0850 level, which is right dead in the center of the overall consolidation that we have been in, with the 1.07 level underneath being support, and the 1.10 level above being massive resistance.

As far as this year is concerned, I think this is set up to be a very range-bound year for the Euro, much like last year. Quite frankly, we may have some extremes here and there, but I think we’re roughly near the fair value point as the Fed Reserve is going to be cutting later this year, and the ECB is most certainly going to be doing the same with Germany heading into a recession. So with that being said, I spend more time looking at this pair as an indication of where the US dollar might go against other assets, not just currencies.

That being said, I do think that we are roughly in the middle of a range, the range of course being the 1.07 level on the bottom and the 1.10 level on the top, and therefore there isn’t a whole lot to do. Once we get to the outer extremes of the range, then I’m more interested in a swing trade. If you are a short-term range-bound trader though, this might be a good back and forth market for you.

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