EUR/USD Price Forecast – Euro explodes to the upside after Trump commentsThe EUR/USD pair was having a fairly quiet Friday, that was until President Donald Trump tweeted that the US dollar was being unfairly strengthened due to soft economic policy by the EU, Japan, and many other countries. Ultimately, I find this a bit ironic, considering that he doesn’t have the power to change monetary policy.
The Euro rallied after comments from President Trump that the EU and others were unfairly holding the value of their currency lower as the United States was raising interest rates. This had market participants a bit spooked, and it caused a spike in the value of the Euro. We reached the 1.17 level, which of course has a certain amount of psychological importance, but I believe that the real resistance is probably closer to the 1.1750 level. The outer consolidation levels include the 1.15 level which I think is a hard “floor” in the market, while the 1.1850 level above continues offer a significant amount of resistance.
Ultimately, I do think that this market will probably pull back but it was starting to bounce anyway. This was simply a reason for “dumb money” to jump in and push the position traders higher. I believe that if we can break above the 1.1850 level, we will still have a lot of noise extending to the 1.20 level above. It is because of this that I think although we have seen a very strong Friday, we remain in the overall consolidation phase that we have been in for some time.
This makes quite a bit of sense, as there are still a lot of concerns when it comes to the European Union and the Brexit, not to mention immigration and several other governments around the EU causing headlines. Because of this, I do not believe that the Euro is going to have an easy time rallying, but I also think that the 1.15 level is about as low as this market will be allowed to go. Look for back and forth trading to continue.