EUR/USD Price Forecast – Euro Bounces Around In Uncertainty

The Euro has been overbought for some time, although there are fundamental shifts in perception when it comes to central bank actions. In other words, the Federal Reserve is expected to cut rates, and they certainly have more room to move than the European Central Bank does. The 200 day EMA has of course attracted a lot of attention, and if the market were to break down below the level, then it opens up the market to pull back towards the gap from the beginning of the week.

EUR/USD Video 04.03.20

To the downside, the 50 day EMA sits right there at the gap, so that of course will have a certain amount of influence as well. Ultimately, this is a market that continues to thrash around and that is very likely to be a main theme going forward, as there is so much uncertainty as to what the market can expect from central banks. While the Federal Reserve is anticipated to cut interest rates going forward, it does make sense that there is a certain amount of US dollar weakness, but quite frankly I believe that it’s not until the 1.1250 level is broken to the upside that the Euro rally can be taken seriously for a longer-term move.

I fully anticipate that we will roll over relatively soon, but this is a market that should be traded with small positions, not large ones as there is more volatility coming down the road, and it is going to be very difficult to hang onto the swings at times.