EUR/USD Forecast – Euro Gives Up Early Gains Again

EUR/USD Forecast Video for 06.04.23

Euro vs US Dollar Technical Analysis

The Euro initially tried to rally on Wednesday, but then gave back the gain as it looks like we are starting to see concerns about the economy play out in the currency markets. After all, if the global economy is going to slow down, then things will change. Ultimately, the market looks as if it is going to continue to see a lot of noise between 1.09 and 1.10, which of course is where we sold off from previously. The “market memory” in this area should come into the picture, but whether or not we actually hold this remains to be seen.

Underneath, the 50-Day EMA currently sits near the 1.075 level and is rising. The market continues to look at the overall picture with tentative behavior, so it would not be surprising at all to see the market pullback towards that area. We are most certainly at the top of the major consolidation region, so at the very least a pullback makes sense.

That being said, if the market were to break above the recent highs near 1.1040, then it’s likely that the Euro could go much higher. At that point, it would more likely than not kick off another leg higher, perhaps ending the Euro to the 1.15 level. Ultimately, this is a market that I think continues to see a lot of choppy volatility, but it does make a lot of sense that we would see this pullback, if for no other reason than to give the market a little bit of a breather after such a grind higher.

The question now becomes whether or not the Federal Reserve will continue to keep interest rates. At this point, we’ve had a couple of Federal Reserve members suggest that they are in fact going to continue to be very tight with monetary policy, and that interest rates will have to continue rising. The fact that inflation continues to range does cause major issues, but at the same time you can also make an argument that there is more confusion than anything else, so it’s probably worth being very cautious, but it does look like we are overstretched at the moment.

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