EUR/USD Forecast – Euro Recovers After Initial Dip

EUR/USD Forecast Video for 15.03.23

Euro vs US Dollar Technical Analysis

The Euro initially fell during the trading session on Tuesday, dipping down below the 1.07 level, but then turned around to show signs of life. By doing so, it looks like the Euro is going to do everything it can to continue breaking higher. By doing so, it suggests that the Euro has a little further to go to the upside, but there’s also a significant amount of resistance above that could come into play. In other words, I think we have a major amount of volatility coming down the road.

Underneath, we have the 50-Day EMA that could come into the picture as support, followed by the 1.05 level. After that, we have the 200-Day EMA, and this certainly looks as if the Euro is trying to make an argument for a move higher, but we also have to keep in mind that there is a lot of negativity out there and it is probably only a matter of time before the market starts to think along the lines of perhaps the Federal Reserve might mean what it says.

That’s been the game for months now, the Federal Reserve comes out and states that they are going to do everything they can to fight inflation, meaning tighter rates, and the market finds one reason or another not to believe them. At this point, it’s now the belief of a lot of market participants that because the Federal Reserve bailed out Silicon Valley Bank, they will almost certainly bail everybody out. In other words, the Federal Reserve continues to lose its credibility over time. Quite frankly, it’s their fault to begin with considering that they have spoon-fed an entire generation of traders on liquidity, so when it comes time to fight inflation, nobody listens.

Unfortunately, this means that something will break again, and ultimately, we will more likely than not have a lot of US dollar strength down the road, but right now it’s clear that volatility continues to be a major issue, and therefore you cannot count on a move lasting too long in either direction at this point. Longer-term macro influence traders are getting chopped up at the moment, and unfortunately, I just don’t see that changing anytime soon.

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