EUR/USD Forecast – Euro Quiet to Open Up the Week

EUR/USD Forecast Video for 11.07.23

Euro vs US Dollar Technical Analysis

The euro has gone back and forth during the trading session on Monday, as we continue to hang around the 1.10 level, but cannot seem to break above it. All things being equal, we are in the midst of forming a bit of a bullish flag, but we have not broken out yet therefore you can’t necessarily jump in with both feet. That being said, I think we have a situation where both of these central banks are doing essentially the same thing right now, and that’s causing a bit of stagnation.

The European Central Bank is currently worried about inflation, but at the same time is starting to see signs of recession and concern in Germany. The Federal Reserve is expected to do 2 more quarter-point interest rate hikes, but at the same time is starting to see some signs of economic slowing. In other words, we have a really messy scenario at the moment, and that shows up in the charts as traders are trying to figure out which direction they want to run.

In general, I think we continue to stay in a range bound type of market for a while, as we kicked around the idea of whether or not central banks can diverge. At this point, it doesn’t look that likely so I think we continue to trade this market from a short-term range bound perspective. The shorter time frames will probably continue to be the best way to approach this market, especially if you have some type of range bound system that uses an oscillator. Ultimately, this is a market that I think continues to see a lot of noisy behavior, and therefore position sizing will be everything.

Ultimately, we will have to have some type of fundamental reason for everything to shift, and until we get that, it’s likely that we will continue to see a lot of back-and-forth. Ultimately, I think this range is what we are stuck in for the foreseeable future and therefore caution is the better part of valor, but you can take advantage of a lot of back-and-forth motion with small positions to slowly build up your account.

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