EUR/USD Forecast – Euro Continues to See Back-and-forth Action

Euro vs US Dollar Technical Analysis

As you can see, the Euro has done very little during the trading session. And therefore, I think we just continue to bounce around. The 1.09 level underneath is support, but on the upside we have the 1.10 level as resistance. That being said, there is a much larger consolidation area that people are paying attention to.

All things being equal, this is a market that quite frankly I think is going to be used more or less as an indication of what the US dollar’s doing because both central banks are likely to cut rates later this year. In fact, the Fed has already admitted that they are going to do so. The ECB started to hint about that recently, so we’ll have to wait and see. This is probably going to be a very range bound market for the year. That being said, we are getting close to an area that could be a bit of a top. So, I am watching this carefully, but from a swing trading perspective, there really isn’t a whole lot to do.

We do get PPI numbers coming out on Thursday and that probably will throw some volatility into the mix. But at this point, I actually prefer shorting if we can find enough exhaustion near the 1.10 level. Until then, I’m essentially just staying away from this pair, but I do drill down to lower timeframes in order to see what the dollar might do against other currencies.

Remember, this is the most widely traded currency pair in the world, and it has the dollar in it, so it gives you an idea of relative strength. Essentially, I just use it as a tertiary indicator as to what to do with the US dollar against multiple other currencies. In general, I think this is a market that you need to be paying attention to, but it is not necessarily something that you have to be active in at the moment.

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