EUR/USD Price Forecast – ADP Sends Euro Into Resistance Again

The Euro initially pulled back just a bit during the trading session on Wednesday but then turned around to rally significantly as the ADP numbers came out at less than half of anticipated. Ultimately, this is a market that has a significant amount of resistance above, and of course we will be focusing on the Non-Farm Payroll figures on Friday. Furthermore, it is an argument right now between central banks and whether or not they are going to be tapering.

EUR/USD Video 02.09.21

That being said, we also have the 200 day EMA sloping lower, suggesting that we are going to see plenty of sellers above. Signs of exhaustion will more than likely be sold into, and therefore I think this is the continuation of the longer-term downtrend, which still had a target of 1.16 longer term. That being said, I think that you will continue to see a lot of choppy and noisy behavior, so at the end of the day you need to be very small with your position size, at least until we get a daily close above the 200 day EMA. As we approach the month of September, you start to see more in the way of volume, especially starting next week.

This has been a nice move higher, but we have not quite broken out yet. With that in mind, we are certainly going to see noisy behavior and therefore I think we are going to be better served by a bit of caution when it comes to position size. With that, there is an argument that we are about to see a reversal of the fortunes of the US dollar, but that probably will not be confirmed until the end of the week.

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