EUR/USD Forecast – Euro Drifts a Bit Lower

EUR/USD Forecast Video for 02.08.23

Euro vs US Dollar Technical Analysis

The euro drifted a little bit lower during the trading session on Tuesday, as we are sitting just above the 50-Day EMA. The 50-Day EMA is an indicator that a lot of people pay attention to, and one that has already proven itself to be important couple of times. The 1.10 is an area that has been important multiple times in the past, so it does make a certain amount of sense that we would see noise occur in that area. The psychology of the big figure of course comes into play but I think more than anything else, we have a situation where the euro and the dollar both are simply waiting around to see what Friday brings.

Friday of course has big news coming out in the form of the Non-Farm Payroll announcement, which of course has a major influence on what’s going to happen in central banks around these currencies, as interest-rate differential continues to play on the minds of traders, but at this point, it looks like both of these central banks are relatively tight. That being said, if the jobs number comes out better than anticipated, that could have people running toward the US dollar, as the European Union is starting to show signs of cracking, as German economic strength is starting to lose ground.

Nonetheless, the 1.09 level underneath could be a short-term support level, then of course we have the 200-Day EMA. On the other hand, if the market were to turn around and go to the upside, the 1.11 level above offers resistance, and if we can break above there, then the 1.1250 level is a significant resistance barrier where we had formed a bit of a high previously.

In general, I think this is a situation where we will see a lot of choppy behavior in the next couple of days, followed by a lot of volatility on Friday. Whether or not we get some type of decisive move it remains to be seen, but right now it certainly looks as if we are not ready to make a bigger decision. I anticipate micro movements between now and 8:30 AM Eastern Standard Time on Friday.

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