EUR/USD Forecast – Euro Drifts Toward 50-Day EMA

EUR/USD Forecast Video for 12.05.23

Euro vs US Dollar Technical Analysis

The Euro has fallen a bit during the trading session on Thursday, as we continue to see a lot of noisy behavior in general. The 50-Day EMA is set right around the 1.09 level underneath, and that is also an area where we have seen quite a bit of noise in the past. This area was previously significant resistance, so a certain amount of “market memory” should come into the picture. If we were to break down below there, it opens up the possibility of moving down to the 1.08 level rather quickly.

On the other hand, if we do bounce from here, the market will likely continue to look at the 1.10 level as a level of “fair value,” and it will attract a lot of attention. It will probably act like a bit of a magnet for price in this type of environment. That being said, it is probably worth noting that the market will continue to be noisy, to say the least, and therefore it’s probably worth pointing out that short-term trading is probably about as good as this gets. The short-term time frames are worth paying close attention to, using these larger numbers for support and resistance.

If we continue to see more of the same behavior, and there’s not a lot out there to think that we won’t, I think at this point, there will be a little bit of patience needed for bigger moves. As far as longer-term trading is concerned, I don’t know that I like this pair because the market simply doesn’t know what to do with itself as both central banks continue to be tight with monetary policy and are probably going to stay “higher for longer.”

Volatility in the Forex pairs has dropped, and I think the EUR/USD pair is probably going to be a good proxy for whether or not there is any real movement in the Forex markets overall. Because of this, keep your expectations somewhat dampened, because it looks like we are settling into some type of range, at least for the time being. Regardless, always keep your position size reasonable as an explosion in one direction or the other will probably cause a massive move as everybody will be covering their positions.

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