EUR/USD Forecast – Euro Stumbles Slightly on Monday

Euro vs US Dollar Technical Analysis

The Euro gapped lower against the greenback on Monday morning to show signs of weakness, but we have turned right back around to show signs of life. The question at this point is whether or not we can turn around completely and go higher and perhaps take out the major resistance barrier. While that could be the case going forward, right now I think we are more likely than not to be seeing a lot of noisy behavior.

The major resistance barrier that I see at the 1.10 level looks like it would be very difficult to take out, and therefore, it’s not until we break above there that I would consider the Euro a bullish currency to own right now. While we have rallied over the last couple of weeks, the reality is that we are at the top of a very well-defined area and of course, we are near an area that has seen a lot of negativity as of late, and that suggests that we could pull back. Pulling back from here opens up the possibility of a move to the 50-day EMA underneath, perhaps down to the 200-day EMA after that. The absolute floor in the market is closer to the 1.07 level as it is the bottom of the consolidation range.

I think most of this year will probably consist of trading in this range because quite frankly, the Europeans are almost certainly going to be cutting rates this year right along with the Americans, so you have two central banks racing to the bottom again. With that being said, I do like the idea of fading rallies in this general vicinity, but I also like the idea of buying if we do get a daily close above the 1.10 level. However, it is the least favored of the two possible outcomes. With that in mind, I am somewhat ambivalent with this pair, with a slight negative bias.

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