EUR/USD Forecast – Euro Gives Up Early Gains

EUR/USD Forecast Video for 12.07.23

Euro vs US Dollar Technical Analysis

The euro has initially tried to rally during the trading session on Tuesday but appears to be at the top of an overall consolidation area as the 1.10 level has offered a bit of resistance. At this point, it looks like the market is going to continue to be a lot of back-and-forth, as the central bank situation in both parts of the world are essentially the same. The European Central Bank has suggested multiple times that they are going to continue to fight inflation, in other words start to raise interest rates further, while the Federal Reserve has pretty much guaranteed that they are going to do at least 2 more interest rate hikes in the next few meetings.

Underneath, there is a significant amount of support near the 1.08 level, and the 50-Day EMA sits just above there. I think all things being equal, this is a market that continues to be noisy, and therefore I think you have to look at this through the prism of a short-term chart, between these 2 handles, and sets up a nice opportunity for the market to bounce around in a 200 point range.

Even if we do break above the top of the candlestick for the trading session on Tuesday, it’s possible that we could go look into the 1.11 level above. The 1.11 level being broken to the upside then opens up the next leg higher in this market, perhaps sending the euro all the way to the 1.15 level. On the other hand, if we were to turn around and break down below the 1.08 level it opens up the possibility of a move down to the 200-Day EMA, which is closer to the 1.07 level.

Going forward, I’m not necessarily looking at this through the prism of anything more than a short-term back-and-forth type of scenario, perhaps using short-term oscillator based trading systems to take advantage of a lot of indecision in this market. That being said, if we do break out of the 200 point range, it’s likely that we then see a much bigger move that we can follow for more of a swing trade.

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