EUR/USD Price Forecast – Euro Building Base?

The Euro has pulled back slightly during the course of the trading session on Monday but then turned around to show signs of strength. That being the case, the market has ended up forming a bit of a hammer not only on Friday but also during the day on Monday, so it shows signs of support. At this point time, the market seems to be paying close attention to the 1.22 handle, as it has previously.

EUR/USD Video 01.06.21

If we were to break down below the hammer from the Friday session, it is likely that we could go looking towards the 50 day EMA. After that, the 1.20 level is the next major support level that people will be paying close attention to. The 1.20 level essentially at this point in time is what I consider to be the “floor the market.” After that, the market could break down rather significantly.

The 1.23 level above is major resistance, but if we can break above there then it is likely that the market goes looking towards 1.25 handle over the longer term. The 1.25 level is an area that has attracted a lot of attention multiple times, so I think it makes quite a bit of sense that we would have to test that on the breakout. All things been equal, this is all about the US dollar and its weakness, queued up with the European Union showing signs of strengthening due to the reopening trade that everybody is banking on with increased vaccinations and lockdowns being the easiest in various parts of the continent.

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