EUR/USD Forecast – Euro Recovers After Initial Selloff

Christopher Lewis
Updated: Apr 3, 2023, 12:51 GMT+00:00

The Euro initially fell during the trading session on Monday, but then turned around to show signs of life as the 1.08 level offered support.

Euro, FX Empire

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EUR/USD Forecast Video for 04.04.23

Euro vs US Dollar Technical Analysis

The Euro initially fell during the trading session on Monday, but then turned around and showed signs of life. Alternatively, the market continues to see a lot of noisy behavior, and therefore it’s likely that we are going to continue to see a lot of back-and-forth choppiness going forward. It’s not exactly a brave call to make, due to the fact that there has been so much of it recently anyway.

The area just above does offer quite a bit of resistance all the way to the 1.1030 level, so I think it is going to be a bit difficult to break through all of that. That being said, it also looks as if the market is not ready to break down either. In other words, I think we are going to enter some type of sideways market for a while, as we try to decide whether or not the risk appetite continues to increase, and of course whether or not the Federal Reserve is likely to turn around its monetary policy. The market is trying to price in a 150 basis point cut by the end of the year, which is rather aggressive, and certainly not in the plans of the Federal Reserve. Because of this, I think there will continue to be a lot of choppy and difficult behavior.

If we break down below the bottom of the candlestick for the Monday session, it’s very possible we could go toward the bottom of the overall range, which is closer to the 1.06 area. The 200-Day EMA also sits there, so that’s something worth paying attention to as well. If we break through all that, that would obviously be a very negative turn of events for the Euro, as the support would have completely given out at that point, and it could open up the possibility of much deeper corrections. That being said, it seems as if it’s nowhere near seeing something like that happen, but I also believe that the area between here and the recent high is going to continue to put up a fight. It’s more likely than not that we will continue to get squeezed in both directions.

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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.

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