EUR/USD Forecast – Euro Testing the 200-Day EMA

EUR/USD Forecast Video for 28.02.23

Euro vs US Dollar Technical Analysis

The Euro has fallen a bit early during the trading session on Monday to touch the 200-Day EMA. The market bounced from that level to turn around and show signs of life, and now threatens the 1.06 level. It’ll be interesting to see whether or not this happens, due to the fact that there is so much downward pressure on the major currencies that are not the US dollar. The US dollar breaking higher due to the fact that people have struggled with risk appetite, and of course the fact that interest rates on the 2 year yield in America continue to climb, despite the fact that Wall Street believes that the Federal Reserve will eventually come and bail them out.

The Euro of course has its own issues, not the least of which will be the fact that the economy is running into significant headwinds, but at the same time has a certain amount of inflation. Because of this, the Euro is not ready to go down without a fight but at the end of the day one of the main things that has this market somewhat levitated is the fact that Christine Lagarde has stated repeatedly that an inflation target of 2% is crucial. Nonetheless, if we continue to see a lot of negativity out there when it comes to risk appetite, the Euro will more likely than not start to sell off yet again.

If we can break down below the 200-Day EMA, then the 1.05 level will be targeted. Anything below there then opens up the possibility of a move to the 1.04 level, and then possibly the 1.0250 level. After that, we have the possibility of going down to the parity level. The parity level of course will attract a lot of headlines, and therefore could be a noisy affair. The alternative scenario would be breaking above the 1.07 level, which would open up a potential move to the 1.08 level. That is where the massive selloff begins from a couple of weeks ago and therefore, I think that as long as we have the same fundamental situation, rallies are more likely than not going to be sold into.

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