EUR/USD Forecast – Euro Continues to Test The Bottom

EUR/USD Forecast Video for 12-02-2024

Euro vs US Dollar Technical Analysis

The Euro initially fell a bit during the trading session on Friday, but it looks as if we are going to turn around and trying to find support with the 1.07 area underneath being a major support level. All things being equal, I believe this is a market that will continue to try to build a base and therefore, if we were to rally from here, it could confirm an attempt to get to the 200-day EMA.

If we can break above the 200-day EMA, then it’s possible that we could go looking to the 50-day EMA above. Keep in mind that the euro has to deal with the idea that Germany is heading into a recession, which of course is going to do the currency no favors because quite frankly, the ECB is going to have to pay attention to that sooner or later, and therefore loosen monetary policy.

That might be what the market is sniffing out right now because for months they were jumping on the idea that the Federal Reserve is going to cut rates. Recently, it sounded as if the Federal Reserve is going to wait a bit. So, I do think you’ve got a situation here where the market is probably going to continue to flounder around this area until we get some type of clarity on the ECB monetary policy situation this coming year.

That being said, I believe that we are looking at a range between about 1.0750 and 1.10 above, unless of course we do finally chip away all of that support, which would open up a move down to the 1.05 level over the next several weeks in the Euro. We are at a major inflection point, and it certainly looks as if you need to be paying attention for the next impulsive candlestick. Once we get that, then the market could give us a heads up as to which direction we are going to go for the next several weeks.

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