EUR/USD Forecast – Euro Falls After Hot US CPI Number

Euro vs US Dollar Technical Analysis

The Euro has fallen rather hard during the trading session on Wednesday after CPI numbers came out hotter than anticipated. That being said, we are still very much in a consolidation area. And I suspect that by the time the Europeans go home, and the Americans are left to their devices, they will do something to make the dollar go down. We are in the midst of a larger consolidation area, so this falls well within the purview of normalcy. We are sitting just below the 200 day EMA, but the 200 day EMA is also flat, so read into that what you will.

Underneath the 1.07 level is an area that has been significant support more than once, and the 1.10 level above is a significant resistance barrier that has been tested multiple times. As we approach the lower part of consolidation, it does make sense that a certain amount of value hunting comes into the picture. That being said, we have an ECB meeting that we need to keep our eyes on, so be aware of that, and that will cause more volatility.

As long as we stay above 1.07, I don’t think anything’s changed. And at this point in time, probably just going to get whipped around. So, I would suggest staying out of this market. There’s just too much headline risk over the next day or two. That being said, if we do get to one of the extremes like the 1.07 level and show signs of exhaustion, I’m willing to trade in the other direction. After all, we continue to bounce back and forth, waiting for some kind of momentum to finally “stick.”

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