EUR/USD Price Forecast – Euro Bounces from Big Figure

The Euro has rallied a bit during the trading session on Thursday to test the 50 day EMA yet again. This is an area that would attract a certain amount of attention as the 50 day EMA is so widely followed by technicians around the world. Ultimately, I do think that it is only a matter of time before we have to make a bigger decision, but right now it appears that the Euro is more than comfortable enough simply grinding sideways more than anything else.

The 1.20 level is supportive and extends that support down to the 1.19 handle. Because of this, I think that there will be plenty of buyers in that region to keep the market supportive, just as I believe that the 1.23 level above extends resistance all the way to the 1.25 handle. There will be a lot of back and forth sloppy action in the meantime, but that is the typical behavior of this pair anyway. It should be absolutely no surprise to traders that the Euro might be noisy to say the least.

We have a couple of different things moving the market right now, which of course would be stimulus and interest rates. As interest rates rise in the United States, that wears upon the Euro, just as stimulus makes the US dollar strength. In other words, I would expect a lot of range bound trading more than anything else over the next several weeks, and therefore am not looking for a very big moves. Once we break out of this range, then we can start to talk about longer-term trading, but right now I just do not see it happening.