EUR/USD Forecast – Euro Gives Back a Little Bit of Momentum on Friday

EUR/USD Forecast Video for 12.06.23

Euro vs US Dollar Technical Analysis

The euro has pulled back just a bit during the trading session on Friday showing signs of hesitation near the 1.08 level. Underneath we have the 200-Day EMA, and above we have the 50-Day EMA. Ultimately, this is a market that is more or less killing time waiting for a couple of central bank meetings. The uptrend line of course has offered a bit of support, so it’s probably not a huge surprise that we have remained somewhat levitated over the last couple of weeks, but it certainly looks as if we are going to make a big decision sooner rather than later.

When I look at this chart, this suggests that there is a lot of support underneath, but I don’t know if that will last through next week, because quite frankly a lot of this is going to come down to the European Central Bank and the Federal Reserve statements. While it is expected that the ECB will probably raise rates, it’s very likely that the Federal Reserve will do what it can to sound hawkish next week, so that the market doesn’t get too far ahead of itself. That being said, the market will do what it will do, and therefore you need to pay close attention to whether or not the 50-Day EMA gets busted through.

If it does, then obviously that would be very bullish and I think at that point in time the euro could go looking to the 1.10 level. On the other hand, if the market were to break down below the bottom of the recent consolidation, then it opens up a move to the 1.05 level. The 1.05 level of course is a large, round, psychologically significant figure, and will attract a lot of attention. Breaking down below that level opens up the floodgates of selling, perhaps based on a major run into the US dollar in general. A lot of this will come down to risk appetite, so we will have to wait and see how this plays out.

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