EUR/USD Forecast – Euro Does Very Little During the Major American Holiday

EUR/USD Forecast Video for 05.07.23

Euro vs US Dollar Technical Analysis

The euro fell slightly during the trading session on Tuesday as we continued to see a lot of back-and-forth. Ultimately, it’s worth noting that it was Independence Day in the United States, therefore, liquidity may have been a huge issue during at least half of the day. The 50-Day EMA sits underneath the recent consolidation, and therefore I think it offers quite a bit of support. All things being equal, this looks like a market that continues to see a lot of lackluster movement, and therefore I think you’ve got to look at this through the prism of a short-term trading opportunity at best.

If you are a range-bound back-and-forth trader, it makes a certain amount of sense that you would see the market participants continue to look at this through short-term movement at best. Ultimately, if you have a decent range-bound trading system, then it’s likely that you could see plenty of opportunities. I’m not looking for anything big to happen anytime soon due to the fact that the central banks are doing the same thing right now, effectively looking tight.

Underneath, if we were to break below the 50-Day EMA, then it’s possible that we could go down to the 200-Day EMA. That is closer to the 1.07 level and a major uptrend line. Breaking down below that would open up the possibility of a much bigger move to the downside. On the upside, if the market were to take out the 1.10 level, then the market could take off to the 1.11 level, an area that was the recent high. All things being equal, I think this is a market that sees more back-and-forth than anything else, and therefore you need to tamper down your expectations.

That being said, we’ve seen recent statements coming out of Europe that the ECB would be paying close attention to the upcoming data so that we could see a certain amount of volatility over the next couple of weeks, but we would need to see some type of shock announcement when it comes to inflation. That being said, you can also expect that same situation at the Federal Reserve.

For a look at all of today’s economic events, check out our economic calendar.