EUR/USD Forecast – Euro Sits on Top of 200-Day EMA

EUR/USD Forecast Video for 08.12.23

Euro vs US Dollar Technical Analysis

The euro has chopped back and forth during the course of the trading session on Thursday, as we are hanging around the 200-Day EMA. The market has also been testing the 1,0750 level, an area that has caused a little bit of noise previously. All things being equal, this is a situation where I think the Euro is waiting to see what happens with the bond markets in the United States. Interest rates have been a great driver of the currency markets lately, as traders are trying to sort out whether or not the Federal Reserve is going to loosen its monetary policy, or if they will have to keep things tight.

Furthermore, interest rates falling lately may have suggestions that perhaps the market is likely to be trying to price in some type of recession, and that helps the US dollar, due to the fact that people may be looking for safety. This will show itself in people buying bonds, driving those yields down. This also drives up the need for US dollars.

All things being equal, you also have to look at this through the prism of whether or not money is flowing into Europe, which is an area that is facing significant recessionary headwinds. In general, I think this is a situation where the traders continue to fade short-term rallies, but we are in an area that support should come into the picture. It’s very possible that the next big move will happen after the Friday session, due to the idea that jobs may or may not move the Federal Reserve. In general, think this is a situation where the euro is going to struggle overall, but if we could take out the 1.0850 level, it could be a very bullish sign, but right now it doesn’t look like we have the momentum to make that happen. Perhaps if the jobs number is horrifically low, that might provide momentum.

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