EUR/USD Forecast – Euro Searching for Stability

EUR/USD Forecast Video for 27.09.23

Euro vs US Dollar Technical Analysis

The euro has gone back and forth during the course of the trading session on Tuesday in the early hours, showing signs of life in what has been relentless selling. However, we are getting rather close to forming a “death cross”, when the 50-Day EMA crosses below the 200-Day EMA, quite often signaling a longer term downtrend. That being said, it does look like we could bounce in the short term, this could give buyers a little bit of hope. I think at this point, it is more likely than not just a matter of being oversold, and with that in mind, it does make a lot of sense that we would see an attempt to recover, at least in the short term. The 200-Day EMA above could offer a little bit of a short-term ceiling assuming that we can even get to that level. Underneath, if we were to break down below the last couple of candlesticks, that opens up a much deeper move to the downside.

Keep in mind that the European Union is heading into a nasty recession, and that of course will have a major influence on the currency. Furthermore, it looks as if the risk off attitude around the world will continue to have people running toward the US dollar, which is traditionally what happens. The Federal Reserve remains much tighter than most other central banks, and even though they did not raise interest rates this last meeting, the central bank has made it clear that they will remain tight for much longer than most participants wish. This provides more reason to see US dollar strength, as people will continue to be attracted to the higher interest rates. In fact, the bond market is continuing only punishing the US government for its reckless spending, as the “bond vigilantes” have finally returned.

On any rally at this point in time, I think it’s probably only a matter of time before you would see selling, and at the first signs of exhaustion, I will have no concerns whatsoever about shorting the euro, perhaps not only against the US dollar, but multiple other currencies as well.

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