EUR/USD Forecast – Euro Shoots Higher for Wednesday Session

EUR/USD Forecast Video for 02.03.23

Euro vs US Dollar Technical Analysis

The Euro has rallied rather significantly during trading on Wednesday, to reach above the 50-Day EMA. This is an indicator that will quite often show quite a bit of dynamic support or resistance, so the fact that we sliced through it is a very bullish site. However, the Euro is going to have to deal with the 1.07 level just above, an area that has been important multiple times. In other words, I do believe that the market is trying to make a bigger move, but at the end of the day there is so much noise that whether or not a move higher can stick is a completely different question.

It appears that based upon the last couple of days, the 1.05 level underneath will be support, so it does make quite a bit of sense that it is now looked at as a floor in the market, at least in the short term. If we were to break down below the 1.05 level, then it’s possible that we could go down to the 1.03 level. It is worth mentioning that the 1.05 level also has quite a bit of interest not only due to the psychological standpoint of the large round figure, but the fact that the 200-Day EMA sits right there as well.

The size of the candlestick is rather important, and it does suggest that there is quite a bit of bullish pressure, at least in the short term. When I look at the chart, I see that the 1.08 level is an area that could very well be resistance, so I think we’ve got a scenario here where we may continue to go a little bit higher, but I wonder whether or not we have enough momentum to go higher? After all the terminal interest rate in the United States now is well above 5%, while in the European Union it is just over 4%. All things being equal, I do think that it is only a matter of time before sellers would come back into the market and I will do so as well when we show signs of exhaustion after a short term rally.

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