EUR/USD Forecast – Euro Rolls Over

EUR/USD Forecast Video for 13.10.23

Euro vs US Dollar Technical Analysis

The euro has fallen significantly during the trading session on Thursday as CPI numbers came out hotter than anticipated. By doing so, it looks as if it is going to show the longer-term trend coming back into the picture. Earlier in the day, the market had recaptured the 1.06 level, but this CPI number now brings the idea that the Fed could raise rates back into the picture. With that being the case, I think you got a situation where you have to look at this through the prism of the bond markets, and it’s worth noting that the short end of the yield curve woke up a bit after the announcement as well.

Whether or not this market completely collapses is of course a different story altogether, but it would not surprise me at all to see this market go looking to the 1.05 level. We have had a strong rally, but it is still but a blip on the radar when it comes to the longer-term trend. This has been the way that the markets have been trading for a while now, occasionally a bit of hope enters the market, only to get squashed by reality. Nonetheless, I can pretty much guarantee that there will be some narrative about how the Federal Reserve “has to start cutting rates” rather soon. This is the game that the media is playing at the moment, and therefore the narrative is something that you are fighting.

That being said, this remains a very volatile market like everything else, and therefore you have to be willing to take your profits rather quickly, perhaps quicker than you normally would due to the erratic nature in the schizophrenic trading that we continue to see as time goes on. Unfortunately, it’s very difficult to be a position trader at this point, at least with anything along the lines of reasonable size. It’s become a scalping environment, and as the high-frequency trading only increases, that might unfortunately make the average retail trader step back and look at it through the prism of the monthly chart instead of smaller time frames. Regardless, I do think that there are plenty of things working against the euro.

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