EUR/USD Forecast – Euro Slightly Positive on Wednesday

EUR/USD Forecast Video for 31.08.23

Euro vs US Dollar Technical Analysis

The euro has rallied slightly during the trading session on Wednesday, as we continue to see upward momentum. The 50-Day EMA sits above the 1.09 level, and at that point in time it’s likely that if we can break above there I think that the Euro continues to go higher. That being said, we have to worry about the Non-Farm Payroll numbers on Friday, which comes into the picture as a potential shakeup of the market.

During the Tuesday session, the Consumer Confidence numbers came out 10 points under the expected figure, and of course the JOLTS Jobs Openings came out 1 million jobs less than anticipated. Because of this, traders have extrapolated the idea that perhaps the Federal Reserve will have to loosen monetary policy, or at least won’t be as strong going forward. While that does make a certain amount of sense, the reality is that by the time we get through the jobs number on Friday, that could change everything.

Looking at the technical analysis, we are between the 50-Day EMA and the 200-Day EMA indicators, and therefore it does look like we are going to “squeeze” at this point. If we do continue to go higher, then it’s very possible that we continue to go higher, perhaps reaching toward the top of the channel that we have been in. On the other hand, if we were to turn around and break down below the 1.0750 level, then we could go down to the 1.0650 level. Anything below there opens up the floor, and we could go much lower at that point, seeing the US dollar strengthened not only against the Euro, but possibly multiple other currencies as well.

At this point, you need to be somewhat cautious over the next couple of days, as it is more likely than not that we will see a bit of chop than anything else. Breaking above the 50-Day EMA could happen between now and Friday, but you have to be somewhat cautious about getting overly exposed to the market between now and that major economic event. With that, position size will be crucial going forward, but we may be able to get quite a bit more aggressive after Friday.

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