EUR/USD Price Forecast – Euro Drifts Towards 50 Day EMA

The Euro initially rallied, or perhaps a better way to put it – attempted to rally – on Wednesday but gave up early gains to crash into the 50 day EMA. The 50 day EMA is paid close attention to many longer-term traders typically, so there should be a little bit of support here regardless. Beyond the moving averages, people also pay attention to the fact that there is structural support underneath near the 1.20 level as it is a large, round, psychologically significant figure and of course it is also an area where we had seen a major breakout previously. “Market memory” will dictate that at least a certain amount of interest will be paid to the Euro in that general vicinity.

EUR/USD Video 28.01.21

ECB members have been a little bit more dovish in their statements as of late, and this is part of what weighing upon the Euro. Nonetheless, this will quickly devolve into a currency war, as both the Federal Reserve and the European Central Bank are looking to devalue currencies. Because of this, I fully anticipate that this market will go back and forth between the 1.20 level and the 1.23 level in the immediate future. It is not unless the Federal Reserve does something rather drastic that I see this breaking out in one direction or the other anytime soon. Range bound traders are going to love this market, as it certainly should be more chop than anything else over the next couple of weeks, and I anticipate that this range should hold for a while.

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