EUR/USD Forecast – Euro Gives Up Early Gains After Interest Rate Hike

EUR/USD Forecast Video for 05.05.23

Euro vs US Dollar Technical Analysis

The euro initially tried to rally a bit during the trading session during the trading session on Thursday but gave back gains as the European Central Bank raised its key interest rates as anticipated. That being said, the question at this point in time is where do we go from here? I think at this point we continue to see a lot of noisy behavior, and therefore the 1.11 level above is resistance, and the 1.09 level underneath his support.

If we were to break down below the 1.09 level, we would also clear the 50-Day EMA to go much lower. Alternatively, if we do pull back from here and find buyers there, that might end up being a nice buying opportunity. Ultimately, this is a market that I think continues to be very noisy but that is something that we have seen for a while. We are a little stretched, so it’s possible that we need to consolidate in order to pick up a little bit of momentum. That being said, you can also make an argument that perhaps we have peaks, so a lot of this will come down to risk appetite.

While the markets have been indecisive, it goes back and forth with how traders feel about potential global growth, and concerns around the world. The US dollar of course is a safety currency, and as a result I think you’ve got a situation where you are going to have to be very cautious about your position sizing and be very nimble as this will continue to be a very noisy affair. Alternatively, this is a situation where we will have a lot of short-term opportunities, but a longer-term trade may take something a little bit more concrete to happen. Ultimately, I think we continue to see a lot of indecision out there, and that will keep the EUR/USD pair and other common currency pairs somewhat sideways and therefore I think you see more of this messy and noisy situation, not less. With this, very cautious, but recognize that we need to see some type of huge impulsive candlestick to get clarity.

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