EUR/USD Forecast – Euro Continues to Try to Rally

EUR/USD Forecast Video for 19.07.23

Euro vs US Dollar Technical Analysis

The euro has rallied slightly early during the trading session on Tuesday, breaking above the 1.1250 level, but showing signs of hesitation. This is a market that had been a little overdone previously, so it does make a certain amount of sense that the path higher becomes a little bit more difficult. A short-term pullback opens up the possibility of buying “cheap euros”, as traders will continue to focus on the idea of whether or not inflation continues to be a major problem for the Europeans.

Keep in mind that right now, the biggest debate is going to be whether or not the Federal Reserve or the European Central Bank will continue to be tight with monetary policy. At this point, a lot of traders are betting that the Federal Reserve is looking to loosen monetary policy much quicker than the Europeans, so that’s part of what’s been driving this pair higher. Furthermore, the euro is considered to be the “anti-dollar”, so pay close attention to what the US dollar is doing against most other currencies, because that will be the big signal as to which direction we are going.

On some type of pullback, there is the possibility that we will find buyers at the 1.12 level, the 1.11 level, and then again at the 50-Day EMA. It’s not until we break down below the 50-Day EMA that the trend could be in serious trouble. At this point, I think you are looking for a “buy on the dip” type of opportunity, or at the very least a market that is going to have to try to grind sideways and work off some of the excess froth.

While I do think that the market will probably eventually see some type of selloff, I would not be interested in trying to short this market, due to the fact that it is so obviously bullish. Simply waiting for some type of value proposition to go long again, so part of what you will probably be doing is waiting for an opportunity. Chasing the trade all the way up here could be very difficult, and perhaps even very expensive.

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