EUR/USD Forecast – Euro Gives Up Early Gains on Friday

EUR/USD Forecast Video for 04.09.23

Euro vs US Dollar Technical Analysis

The euro rallied a bit initially during the day on Friday, but after the jobs number we have seen it plunge, as we have now broken below the 200-Day EMA. The 200-Day EMA is obviously an indicator that a lot of people pay attention to, and therefore it’ll be interesting to see how this plays out. If we break down below the reset level, which is just below where we are now, then the market really could start to unwind. In that scenario, I think that the euro goes looking to the 1.06 level. All things being equal, this is probably more about the US dollar than it is anything else, and by extension, the yields coming out of the United States.

Alternatively, if we do break down below there, it could kick off a big run lower, and it is worth noting that Monday is Labor Day and the United States. There will be a significant lack of liquidity that we need to pay close attention to. Furthermore, the market is probably going to also have to deal with the fact that more money is coming into the market next week, as a lot of Wall Street traders and firms come back from the summer break. Ultimately, we could see a little bit more in the way of determination on what happens next.

Ultimately, this is a situation where the next couple of days will be crucial, so you need to be cautious. All things being equal, this could be either the test of the bottom of a major channel, or potentially a breakdown below the bottom of it, which would of course be very negative. In general, this is a market that remains very noisy, and therefore will have to be approached with a certain amount of caution.

I do believe this point in time is only a matter time before we make a bigger move, but it certainly looks as if we are going to struggle to go higher. If we can break above the 50-Day EMA, then the market could go all the way to the 1.12 level. On the other hand, if we break down then we could really start to fall from here.

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