EUR/USD Forecast – Signs of Improvement Start to Appear

EUR/USD Forecast Video for 30.12.22 by Bruce Powers

For the second time this week the EUR/USD triggered a bullish breakout of the inside week from last week, as the pair advanced above 1.0659. This is bullish price behavior.

Higher Price Targets

If price keeps rising from here, the EUR/USD will next contend with its recent trend high at 1.0736. A little above there is a target zone from around 1.0793 to 1.0787. That zone consists of previous price structure around 1.0787, and the 127.2% Fibonacci extension of the most recent pullback at 1.0793.

Bullish Signs Increasing

Next, for signs of continued strengthening, watch for a daily close on Thursday above Wednesday’s high of 1.0674. An initial bullish signal triggered earlier in the day on the daily time frame as the pair traded above Wednesday’s high. Nevertheless, a daily close above prior daily highs is going to be important in determining the sustainability of a bullish advance. If that occurs, it would be the highest daily close of the past 10 days and another bullish piece of evidence.

There are a few bullish trend indications for the EUR/USD to be aware of. The pair is above both its 200-Day EMA and 21-Day EMA. The 21-Day EMA has acted as clear trend support for the past two weeks and previously as the uptrend moved off the bottom. Therefore, the 21-Day is an important trend indicator to watch going forward. Further, the EUR/USD rose above the 55-Week EMA three weeks ago and it has closed above it since then, another sign of strength.

Caution Still Warranted

Although it is starting to look more likely that the EUR/USD wants to go higher, so far it continues to evolve an expanding triangle consolidation pattern, where the lines at the top and bottom borders of the pattern are angled away from each other. This can best be seen on an intraday chart like the 2-hour chart below.

In general, an expanding triangle formed near the top of a trend is considered bearish. However, given the developments highlighted above it may fail in this case and breakout to the upside instead. So far, there are early signs of this happening as noted above.

Regardless, until there is a daily close above the high of the past nine days or above last week’s high, as of now, further development of the expanding triangle is possible.

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