EUR/USD Forecast – Euro Pulls Back Slightly After ECB

Euro vs US Dollar Technical Analysis

At this point, we’ve had the ECB come and go and quite frankly, not a lot to read into it. It’s not a huge surprise. I think at this point we may go looking to the 1.09 level, but that’s an area that previously had been important. So, it’ll be interesting to see how this plays out. The market has gone from one large figure to another, meaning from 1.09 to 1.10 to 1.09 and back to 1.08. And I think that’s probably how this plays out. However, this is a market that you can watch to get the direction of the US dollar as it tends to carry through in other currency pairs. The Euro is very short-term driven, and the ECB has already cut rates.

So, it’ll be interesting to see if people continue to jump into the idea that the Federal Reserve is going to follow suit. You know, we’ll have to wait and see how that plays out. But when you zoom out of the chart, you can see just how driven the market is from the big figures. At this point, it does look a little overextended, so a pullback makes plenty of sense, but quite frankly, this is not a long-term setup, it almost never is with the Euro. The interest rate differential favors the US dollar, but only slightly, so that’s not a huge deal either. With that being said, I remain fairly neutral on this pair.

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