EUR/USD Forecast – Euro Finding Buyers on Dips

EUR/USD Forecast Video for 20.04.23

Euro vs US Dollar Technical Analysis

The Euro initially pulled back just a bit during the trading session on Wednesday but continues to see a lot of noise near the 1.09 level, in an area that of course is a large, round, psychologically significant figure, and an area where we’ve seen a lot of noise recently. That being said, there’s also a lot of noise above near the 1.10 level, which is eerily reminiscent of the GBP/USD pair. Ultimately, I think this is a market that is trying to decide whether or not the US dollar is going to continue to sell off, or if we have peaked.

Because of this, and the fact that we have a lot of PMI numbers coming out on Friday, I anticipate that this market is probably going to hang out in his general vicinity for a while, therefore I think it’s more or less going to be sideways chop over the next couple of days. If we do break down below the 1.09 level, then it opens up the possibility of a drop down to the 1.08 level, followed very quickly by the 50-Day EMA. On the other hand, if we turn around and rally from here, we need to take out the high to get super bullish, and at that point in time I think that the Euro will probably go looking to the 1.1250 level, possibly even as high as 1.15 level over the longer term.

A lot of this comes down to the fact that the European Central Bank is still in the midst of its tightening cycle, while it is generally believed that the Federal Reserve is coming to the end. Whether or not that’s actually the case remains to be seen, but at this point there are a lot of stresses in the economy, so traders are trying to jump ahead of the Federal Reserve, but quite frankly if the Federal Reserve does start cutting, that’s not going to be a bullish thing in the end so you may see the Euro spike for a bit, only to turn around and crumble as people rush toward the safety of treasuries. In other words, chop is going to continue to be the way forward.

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