EUR/USD Forecast – Euro Explodes to The Upside

EUR/USD Forecast Video for 06.11.23

Euro vs US Dollar Technical Analysis

The euro exploded to the upside during trading on Friday, as the market has rallied toward the 200-Day EMA. That being said, we are also starting to run into the top of the bullish flag, so I suspect that we could very well see a bit of exhaustion in this area. If that were to be the case, then the market is likely to continue finding sellers on rallies. True, the jobs numbers came out a little weaker than anticipated, but the Federal Reserve is far from shifting its monetary policy.

At this point, if the market were to rally from here, if we can break above the 200-Day EMA and stay above there on a daily close, that would obviously be a very bullish turn of events. In that scenario, you start to look at a move toward the 1.09 level above. All things being equal, this is a market that I think will drop from here, mainly due to the fact that there is still the extreme likelihood that the European Central Bank loosens monetary policy much quicker than the Federal Reserve does. Because of this, we are still at a market that is taking a look at this bearish flag, but you want to follow what the market does, not what it “should do.”

The size of the candlestick is rather impressive, so it’s not like I would step into this area and start shorting right away. I need to see some type of price action that gets me thinking that we are going to pull back. All I can say at this point is that we are at an area that definitely should create some type of reaction, so I’m just waiting to see what that reaction is going to be. The reality is that we are more likely than not heading into a recession globally, so we could get a situation where the US dollar gets sold off in the short term, only to get bought again for safety. Furthermore, there are a lot of geopolitical concerns out there that could drive the value of the US dollar higher too.

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