EUR/USD Forecast – Euro Pulls Back From Extreme High

EUR/USD Forecast Video for 26.04.23

Euro vs US Dollar Technical Analysis

The Euro initially tried to rally during the trading session on Tuesday, but then turned around to show signs of hesitation. At this point, the market is a little overstretched but quite frankly I don’t necessarily feel comfortable shorting this market either. After all, we’ve seen a bit of a relentless uptrend, but I think that will continue to be the case. Ultimately, this is a scenario where you’ve got a lot of noise just waiting to happen and therefore I think you probably continue to see a lot of consolidation.

The 1.09 level underneath should be supported, and the 50-Day EMA underneath there should also come into the picture as support. I believe that “buying on the dips” continues to be how most traders look at this market, so therefore you probably need to be very cautious about trying to short this market, at least at the moment.

If we were to break down below the 50-Day EMA, then you can start to make an argument about shorting, but right now we are so far from that happening that I’m not overly concerned one way or the other. To the upside, we have the 1.1050 level that has offered resistance, and it certainly looks as if it’s going to be a bit difficult to get above. However, if we were to do so, that would obviously be very bullish for the Euro, and would probably be very negative for the US dollar in general. I think this is a situation where you would see a lot of questions asked about risk appetite, and whether or not we are simply going to go straight up in the air.

At this point, it appears that the ECB is going to remain very hawkish, but at the same time it’s also possible that the Federal Reserve is getting closer to the end of its rate hiking cycle. With that being the case, I think you’ve got a trade set up for more of a buy on the dip situation, but if we do break down below the 1.08 level, then it’s likely that we could see a lot of US dollar strength suddenly enter the market.

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