EUR/USD Forecast – The Euro Continues to Plunge

Christopher Lewis
Published: Oct 2, 2023, 13:15 GMT+00:00

The euro initially tried to rally during the trading session on Monday but turned around to show signs of weakness yet again.

Euros, FX Empire

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EUR/USD Forecast Video for 03.10.23

Euro vs US Dollar Technical Analysis

The euro initially tried to rally during the trading session on Monday but gave back quite a bit of the gain to turn around and show signs of negativity. At this point, the market looks as if it is hell-bent on reaching the 1.05 level, which of course is a large, round, psychologically significant figure and an area that a lot of people will be paying close attention to. If we were to break down below the 1.05 level, then the market really could start to fall apart. At that point in time, then the market could very well plunge toward a 1.0250 level, followed by the parity level.

On any type of rally at this point, I think you have to look for signs of exhaustion that people will be settling into. We recently formed the “death cross” which of course is a very negative turn of events from a technical analysis standpoint and of course the longer-term standpoint. Any rally at this point in time looks suspicious to me, therefore I think we have a rather strong trend that is ready to continue to the downside. Ultimately, the interest rates in America continue to be very strong and continue to show plenty of strength. With this, we also have to look at the European Union, and just how weak it is at the moment. After all, the European Union is likely ready to plunge into a significant recession, and that of course will be negative for the currency.

Ultimately, it’s not until we break above the 1.07 level that I even begin to entertain the idea of getting long of the euro, as the market has been so obviously negative and will continue to be from everything I see. Another thing to keep in mind is that the pair tends to be sensitive to risk appetite, with the US dollar being the “ultimate safety currency”, and something that we need to keep in the back of our mind as we trade this pair. As the US dollar has been very strong as of late, I think that will continue to drag down the euro overall.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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