EUR/USD Forecast – Euro Testing the 50-Day EMA

EUR/USD Forecast Video for 07.03.23

Euro vs US Dollar Technical Analysis

The Euro has rallied a bit during the trading session on Monday, as it looks like we’re going to continue to see a lot of noise in this pair. The 50-Day EMA currently sits at roughly 1.0675, and the market has tested that level. Ultimately, this is an indicator that a lot of people pay close attention to, but we are also between that and the 200-Day EMA, which typically means that you are going to see a lot of volatility in general. The 1.06 level is an area that a lot of people have paid close attention to recently, but I think that the support extends all the way down to the 1.05 level. The 1.05 level also features the 200-Day EMA, so it all ties together quite nicely.

If we were to break down below the 200-Day EMA, the market could drop down to the 1.03 level. The 1.03 level is an area that had been important previously. Ultimately, this is a market that continues to see a lot of noisy behavior, which makes quite a bit of sense considering that the economic situation seems to be all over the place. Ultimately, I think this continues to be a lot of noise more than anything else, but it is worth noting that we had seen a lot of selling pressure from the top. When you look at the recent high, you can see that the selloff began with 2 massive negative candlesticks.

If the rally did get to that area, I think it would be very difficult to break out above. Quite frankly, I see a significant amount of resistance at multiple levels. The 50-Day EMA of course is a major barrier, and then the 1.07 level is an area where we have seen resistance previously, and of course the 1.08 level. It’s not until we break above there that we can even begin to threaten those massive negative candlesticks where so much had changed in momentum. It is because of this that I think this pair ultimately remains a “fade the rally” type of situation, especially as inflation in the United States remains stubbornly high, thereby forcing the Federal Reserve to remain “tighter for longer.”

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