EUR/USD Price Forecast – Euro Explodes To The Upside

The Euro has gapped higher to kick off the trading week, reaching towards the 1.15 level, as the US dollar is getting hit due to the fact that the Federal Reserve is one of the few places that can cut its interest rates with any type of significance. With that being the case, the US dollar is taking it on the chin due to that. Furthermore, once they do make another couple of cuts, it’s very likely that you may see the markets turn right back around. In the short term though, it’s clear that the Euro has been a major beneficiary as they cannot cut rates. Think of it this way: markets had been priced for the ECB to not cut rates, while the Federal Reserve wasn’t supposed to either. So while this is looking very much like everybody is running towards the Euro, it’s more or less repricing the US dollar.

EUR/USD Video 10.03.20

The 1.15 level is formidable of course, but if we break above there it’s likely that we will get more of a “blow off top”, which could send this market to much higher levels, before rolling right back over. That being said, you certainly can’t short the Euro right now, as it is starting to see far too much in the way of strength from a short-term perspective. With that, I would also be cautious about trying to get too cute with the markets, as this is starting to look a lot like the type of volatility that we had seen back in 2008.