EUR/USD Price Forecast – Euro Continues to Hit Ceiling

The Euro has rallied a bit during the trading session on Tuesday to challenge the 1.23 level again. This is an area that has been resistance for a while, so it is worth paying attention to as a potential trigger for another move. If we can break above the 1.23 level, then we will grind it towards the 1.25 handle above, which of course is a large, round, psychologically significant figure. That being said, I do believe that dips will continue to be bought, but we could see a significant pullback and still find the market very bullish. In fact, I think we could drop all the way down to the 1.20 level and not change much as far as the analysis is concerned.

EUR/USD Video 06.01.2021

The 50 day EMA has just broken above the 1.20 level and tilting higher. This suggests that we have a significant amount of buying pressure in that general vicinity, as it was such resistance previously. All things being equal, I do think that we continue to go higher, and I believe that most pundits expect the Euro to gain as most economists expected the European Union to grow by over 4% during the year, while the United States is a little bit higher than 3%. Under normal trading circumstances, that should send this pair higher.

That being said, if we do suddenly see even darker headwinds out there when it comes to the global economy, then you would see a reversal. In the short term though, it appears that everybody is willing to look beyond what is going on right now and towards the post-coronavirus world.

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