EUR/USD Forecast – Euro Drops on Friday

Euro vs US Dollar Technical Analysis

You can see that the Euro has fallen down to the 200 day EMA, an indicator that a lot of people pay close attention to, and perhaps even more importantly, the 1.08 level. This is a market that is range bound and probably will be for the majority of the year. At this point, it looks like we are seeing a bit more negative action in this pair and that just tells me that the US dollar is strengthening overall. In fact, this is a proxy for a live US dollar index chart for a lot of people as it is such a huge part of that market. Underneath I see the 1.07 level as a major support level and that could be where we’re trying to get to.

Keep in mind that the Europeans are going to have to worry about the recession in Germany, so that will put downward pressure on the Euro despite the fact that the Federal Reserve has already admitted that they were going to cut rates three times this year. With that being the case, I think this continues to be range-bound longer term, but in the short term, it certainly looks like the buyers are on strike. A little bit of back and forth trading is probably more likely than not.

So, if you’re short term, this is probably the market for you. If you’re more of a swing trader like I am, then you’re looking for resistance at 1.10 to start shorting or support at 1.07 to start buying. We are heading towards an area that is becoming more and more interesting, but we’ll have to wait and see if we are trying to swing trade this market. If we break out of this 300 point range, then things could get a bit more interesting.

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