EUR/USD Forecast – Euro Rallies Towards Resistance

Christopher Lewis
Updated: Mar 21, 2023, 13:05 UTC

The Euro has rallied significantly during the trading session on Tuesday to reach the 1.08 region, an area of significant resistance.

Euro, FX Empire

In this article:

EUR/USD Forecast Video for 22.03.23

Euro vs US Dollar Technical Analysis

The Euro has rallied a bit during the trading session on Tuesday to reach the 1.08 level. That being said, this is an area that should be a significant amount of resistance all the way up to the 1.10 level, and with the Federal Reserve meeting coming on Wednesday, I suspect that we could be setting up for a trade. A lot of this will come down to whether or not Jerome Powell is hawkish or dovish, and what they do as far as interest rates are concerned. There is consensus across the board that nobody really knows, and I think that’s probably part of what you are seeing here.

While Wall Street and various large firms want the Federal Reserve to stop raising rates, the reality might be something different. After all, they start to worry about inflation, and if they choose to loosen monetary policy again, that will almost certainly kick off even more inflation. That being said, the market has been arguing with the Fed for a while, and now that we have had a couple of banks failed, they believe that the Fed simply “must loosen” sooner than later.

The market has sold the US dollar as of late, but if Jerome Powell and company surprise everyone, and stay extraordinarily hawkish, that could send this market plunging. I do think that the next couple of trading sessions could be rather important, so therefore we need to be watching how the market behaves. Any sign of exhaustion between now and 1.09 has to be looked at with suspicion, as it’s an area where we have seen an impulsive move lower, as the market started to plunge. It’s probably worth noting that we bounced from the 200-Day EMA, so that of course is a bullish sign, but right now it could be a target if we break down. On the other hand, if we do rally from here, you need to be cautious of the 1.10 level above, because if we were to somehow break above there, that could open up a huge leg higher in the Euro. That would almost certainly involve the Federal Reserve changing its overall tune.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

Did you find this article useful?