EUR/USD Forecast – Euro Rallies to The 50-Day EMA

EUR/USD Forecast Video for 01.11.23

Euro vs US Dollar Technical Analysis

The euro has initially fallen a bit during the early hours on Tuesday but turned around to show signs of strength. That being said, we are struggling with the 50-Day EMA, which is an indicator that a lot of people will pay close attention to, and of course we are also near the recent high, so it does make a certain amount of sense that is a bit of “market memory” to be found in this area.

Looking at this chart, we are getting rather close to the top of the flag body, so it does suggest that perhaps we are going to continue to see quite a bit of resistance in this area. In fact, it is probably more likely than not that we are going to drop from here. At this point, the market could possibly drop down to the 1.06 level. Underneath, we have the uptrend line of the flag that could offer support, so we need to pay close attention to them. A move below the trendline opens up the possibility of a move to the 1.05 level. The 1.05 level is of course a large, round, psychologically significant figure.

In general, this is a market that will continue to be noisy and choppy, just as we have seen in multiple other markets. I do expect this market to pull back from here, as I don’t think that the fundamental situation has changed enough to make it viable to hang on to the euro. The size of the candlestick does suggest a certain amount of short-term bullish pressure, but it more likely than not will give way to the overall concern about geopolitical concerns, and of course the higher interest rates in the United States. The European Union is about to go into a nasty recession, and that will more likely than not weigh upon the euro itself.

It’s not until we break above the 200-Day EMA that I would be paying attention to going long in this market, which obviously would probably need to see the fundamental situation turnaround at this point in time, so with that being the case, the market is likely to continue to see plenty of sellers jump in before that were to happen.

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