EUR/USD Forecast – Euro Drops to Kick Off the Week

EUR/USD Forecast Video for 25.07.23

Euro vs US Dollar Technical Analysis

The euro has pulled back just a bit during the trading session on Monday, as it looks like we are trying to figure out whether or not the US dollar is going to continue to strengthen, or if this is a simple pullback. At this point, I think it’s more or less still a simple pullback, and of course we do have the Federal Reserve this week which could throw a lot of noise in this market. In general, the 1.10 level continues to be an area where we could have a certain amount of psychological support and of course the fact that we have the previous action that had a lot to do with where we were going in that moment.

All things being equal, this looks like a situation where value hunters will return, and take advantage of “cheap euros.” We could find the market heading toward the 1.1250 level again, which is a massive area of resistance. Breaking above that level then opens up the possibility of a move to the 1.15 panel, and with that being the case, I think we would continue to see more or less a “FOMO trade” coming into the picture.

Alternatively, if we were to break down below the 1.10 level, then it’s possible that we could drop down to the 1.09 level, just below the 50-Day EMA. All things being equal, this is a market that I think continues to be very noisy, and of course the Federal Reserve meeting this week will have a lot to do with where we go next, as the euro is considered to be the “anti-dollar.” In other words, if the dollar goes up, the euro goes down, and vice versa. This is a scenario where we have seen quite a bit of noise around the central banks, and I just don’t see how that changes anytime soon, and therefore I do believe that volatility is probably going to get worse, not better and therefore your position sizing needs to take this into account. Regardless, I’m not ready to start shorting anytime soon, so now it’s a matter of finding value.

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