EUR/USD Forecast – Euro Gives Up Initial Gains

EUR/USD Forecast Video for 24.08.23

Euro vs US Dollar Technical Analysis

The euro initially tried to rally a bit during the trading session on Wednesday but ran into problems with PMI numbers coming in lower than anticipated in the European Union. This suggests that we are in fact heading into a recession in the European Union, something that makes quite a bit of sense, especially considering that Europe is going to have problems with power later this year. In other words, we could be seeing a bigger move, but we also have to keep an eye on PMI numbers coming out of the United States. Beyond that, the real fireworks may be on Friday, as the central bank leaders of both the Federal Reserve and the European Central Bank have speeches at Jackson Hole.

At this point, if we break down below the 200-Day EMA, it opens up a move down to the 1.0650 level, which is an area that I think will be important. All things being equal, I think we’ve got a situation where the market certainly looks very frail, but part of this could come down to the PMI numbers coming out late during the session on Wednesday from the United States. After all, if America finds itself in the same position, then it will end up being a “no harm, no foul” type of situation.

All things being equal, I do think that the US dollar is a being more attractive than the euro over the longer term, especially considering that the global economy could be running into some issues. Ultimately, one of the biggest things that we have to pay attention to is that we are between the 200-Day EMA indicator and the 50-Day EMA indicator, which typically means we are about to make a big move. By the end of the week, I suspect that we will know where the next leg in this market runs to. Between now and then, I suspect that we are going to have more choppiness than anything else, although when I look at the chart right now, it certainly looks as if the downside has a little bit more power. Whether or not that holds remains to be seen.

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