EUR/USD Forecast – Euro Pulls Back Again on Tuesday

EUR/USD Forecast Video for 10.05.23

Euro vs US Dollar Technical Analysis

The euro has fallen a bit during the trading session on Tuesday, as we continue to see a lot of noisy behavior. At this point, the 1.11 level continues to be significant and a lot of people will be paying close attention to it. If we break above there, then the market is likely to continue going to the 1.1250 level. This is a situation where you will continue to see a lot of volatility but breaking above the 1.1250 level could unleash a huge move higher.

On the other hand, if we continue to see some selling pressure here, the 1.09 level is an area I would be paying close attention to, due to the fact that the 50-Day EMA sits around that same area, so obviously there will be a certain amount of technical support in that region. I do think that given enough time we should see buyers come into the market. However, if you were to break down below the 50-Day EMA, it’s very possible that the euro could continue to go much lower, perhaps reaching down to the 200-Day EMA, which is right around the 1.07 level.

Keep in mind that the Federal Reserve remains very tight with its monetary policy, and this of course will continue to put a little bit of gravity in this market, despite the fact that everybody is trying to press the issue that the Federal Reserve is done raising interest rates when in reality monetary policy goes far beyond interest rates. They are going to stay tight in many other ways as well, and run off their balance sheet.

That being said, there’s also the question of whether or not the global economy is going to start slowing down because, typically that does drive up demand for US dollars as it is considered to be a safer asset. All things being equal, I think at the very least we are probably going to see continued consolidation because the upward momentum seems to be slowing down. As long as that’s the case, it’s very unlikely that the market will give big moves, but we do have those couple of levels to pay attention to.

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