EUR/USD Forecast – Euro Gives Up Early Gains After Gapping Higher

EUR/USD Forecast Video for 14.03.23

Euro vs US Dollar Technical Analysis

The Euro has gapped higher to kick off the trading session on Monday, and therefore showing a bit of bullish pressure to kick off the week. That being said, the market ran into a bit of trouble near the 1.0750 level, to turn around and form a bit of a shooting star. If we were to break down below there, then it’s possible that we will fill the gap, and perhaps reaching down to the 50-Day EMA. Breaking down below there could open up a move down to the 200-Day EMA.

Breaking down below the 200-Day EMA could send the market much lower, opening up the possibility of a move down to the 1.03 level, possibly even down to the parity level. The parity level of course will attract a lot of headlines and a lot of order flow, so I would pay close attention to the market if we get down there. On the other hand, if we were to turn around and break above the top of the candlestick for the trading session on Monday, then it’s possible that we could go looking to the 1.09 level.

Speaking of the 1.09 level, you should probably keep in mind that it is basically where the 50% Fibonacci level happens, from the massive selloff during the previous run lower. This obviously is a crucial technical indicator and will more likely than not be defended by sellers. Because of this, I still prefer to fade rallies as they occur in the Euro, especially with the Federal Reserve out there looking to keep interest rates tighter for longer.

Speaking of which, Jerome Powell has just recently reiterated that viewpoint, and even suggested that perhaps interest rate hikes may have to come quicker than Wall Street and other major financial hubs have banked on. With that being the case, I think the US dollar still shows a bit of strength, but this recent rally does make a bit of sense considering that we had fallen so hard, and of course the 200-Day EMA was defended by a double bottom. More likely than not, this remains a very choppy pair with more of a downward pressure on it.

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