EUR/USD Forecast – Euro Continues to Sit at Bottom

Euro vs US Dollar Technical Analysis

The Euro currently sits just above the 1.07 level, an area that is massive support. This is the bottom of a major range that we had been in for a while, so it’s going to be interesting to see how we behave here. We have an interest rate decision later in the day that obviously will have major implications as to where we go next, and in this environment, I do think you need to be very cautious.

If we close at the end of the day below the 1.07 level, then I think we go much lower. On the other hand, there is an argument to be made that perhaps we’ll end up reverting to the mean, meaning that we will go back to the 200 day EMA or even the 50 day EMA above, which are both indicators that a lot of people will be following.

The 1.08 level sits right around that area as well. So, there’s a certain amount of psychology attached to it. On the upside, the 1.10 level is the major resistance barrier that a lot of people will be keeping an eye on over the next several weeks, if not months, as both of these central banks are likely to start cutting rates sometime this year. With that being the case, there is no clear winner here. So I suspect that this pair remains somewhat neutral for the time being. We’ll have to wait and see. A lot of this will come down to how the market interprets the press conference after the decision as well, and that’s always a bit of a coin toss.

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