EUR/USD Forecast – Euro Continues to Search For Floor

EUR/USD Forecast Video for 04-01-2024

Euro vs US Dollar Technical Analysis

As you can see, the Euro initially tried to rally a bit during the trading session on Wednesday but continues to struggle just a touch against the US dollar. It is a better looking day than the Tuesday session was but ultimately, we are still in the midst of pulling back, and it does make a certain amount of sense considering that we had spiked to get there and therefore one would have to think that perhaps we need to take a little bit of a breather with the euro strengthening. There are a lot of questions surrounding the euro at the moment because quite frankly, there are plenty of people out there trying to determine whether or not the Federal Reserve is going to cut three times next year and whether or not the ECB will follow suit.

So far, the Europeans are pretending they won’t have to cut rates, but it’s worth noting that most of the larger economies in Europe are either in a recession or getting there quickly. Perhaps this realization will put a little bit of a lid on the euro, but right now I think we are still in a market that you would have to look at as a potential buy on the dip scenario. We simply rallied too hard and too fast to sustain that type of momentum.

The 50 day EMA sits just below and could be thought of as a potential support level. Underneath there we have the 200 day EMA and then finally the 1.0750 level, all of which could be areas of a turnaround. If we do break higher and clear the 1.10 level, I think that would be a very strong sign that the rally in the euro is returning and we could go looking to the 1.1250 level. So far, we still haven’t seen any inclination that’s going to happen easily, but it is something to keep in the back of your mind as it would be a very strong sign and would probably cause a lot of people to pile into the trade.

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