EUR/USD Price Forecast – ECB Has an Emergency Meeting

Euro vs US Dollar Technical Analysis

The Euro has taken a bit of a hit during the trading session right at the 1.05 level, a significant psychological level that has attracted a lot of attention. Part of this is because the ECB has decided to have an emergency meeting, suggesting that they are going to reinvest PEPP proceeds. In other words, they are going to do a bit of back door easing. The market looks at this as dovish for the central bank and of course the currency, especially against the US dollar.

Later in the day, the Federal Reserve will tighten its monetary policy. At this point, the question is whether or not it’ll be 50 basis points, 75 basis points, or possibly even as many as 100 basis points. Regardless, that makes it even more attractive than the Euro, but the bond markets in the European Union are having major issues, and therefore the ECB had to step in.

In a bit of irony, this will possibly be good for commodity markets as well, because they are based on US dollars, meaning that prices will continue to go higher over the longer term. (At least that’s the theory.) At this point in time, anytime the Euro rallies eat is something that you should sell into. I believe that given enough time, this pair could go down to the parity level, perhaps by the end of the summer. That being said, it’s very likely that a rally gives you an opportunity to pick up “cheap US dollars.” It is not until we break above the 1.08 level that you can even begin to have the conversation of a trend change.

EUR/USD Price Forecast Video 16.06.22

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