EUR/USD Forecast – Euro Gives Up Early Gains

EUR/USD Forecast Video for 17.04.23

Euro vs US Dollar Technical Analysis

The Euro had initially tried to rally during the trading session on Friday, but as you can see it is giving back some of its strength. Alternatively, it looks like the Euro is reacting negatively to the retail sales number in the United States as traders begin to worry about whether or not the growth situation is going to fall apart, as it seems like the market has been living in some type of dream land. As the market starts to price in the idea of an economic slowdown, that makes the US dollar more attractive as people pile into US treasuries.

Nonetheless, at the very least you have to look at this through the prism of a very overstretched market, so with that being the case you need to be very cautious about your position size and jumping in at these elevated levels. Even if the Euro continues to rally over the longer term, at the very least it does make a certain amount of sense that we would see the market pullback in order to see a lot of value hunters coming back in. Alternatively, this is a market that will continue to see a lot of questions asked about not only the United States, but Europe itself, as it looks like things are going to get quite a bit uglier.

If we break down below the 1.10 level, it could very well open up a move down to the 1.09 level. The 50-Day EMA sits right around the 1.08 level, and it does suggest that we could see an attempt to get back to that region. It’s a bit early to call that, but at the very least we need to slow down because the demise of the US dollar has been greatly exaggerated. I expect to see a lot of volatility in almost all markets, and that typically means that we are going to see the US dollar pick up a bit of strength due to the idea of safety. Alternatively, if we do turn around and rip to the upside and break above the high of the Friday candle, it would show just how bullish the market has become again.

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