EUR/USD Forecast – Euro Showing Strength on Monday

EUR/USD Forecast Video for 22.08.23

Euro vs US Dollar Technical Analysis

The Euro rallied a bit during the trading session on Monday, showing signs of life as we have broken above the 1.09 level. That being said, the market breaking above there opens up the possibility of a move to the 50-Day EMA, sitting just below the 1.10 level. All things being equal, this is a market that I think eventually will break above there, not necessarily because I think the US dollar is going to be eviscerated, but the US dollar probably softens a bit against the Euro.

The 200-Day EMA underneath continues to offer support, hanging right around the uptrend line underneath that has been so important for so long. The market is likely to continue to see a lot of volatility and choppiness, but I do think that the overall consolidation that we have been in for a while makes quite a bit of sense. The market is likely to continue in the overall channel that we had been in. If that’s the case, then it’s likely that the market could go looking to the 1.1250 level.

If we were to turn around and break down below the 200-Day EMA and the uptrend line, then it opens up a move down to the 1.0650 level, an area where we have seen a bounce from previously. Anything below there opens a move to much lower, and therefore a move to the downside. All things being equal, this is a market that I think continues to grind a little bit higher mainly due to the fact that a lot of traders out there are still trying to bet on the idea that the Federal Reserve is going to perhaps slow down its tightening policy.

The question now then falls on the shoulders of the ECB, and what they are going to be doing. Keep in mind that at the end of the week, we are going to hear from both Jerome Powell and Christine Lagarde in Jackson Hole, Wyoming. There is a good chance that the market just drifts slightly higher between now and then, and then at the end of the Friday session we may have a little bit more clarity, but as things stand right now it looks like we probably drift a little higher.

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