EUR/USD Price Forecast – Euro Fails at 200 Day EMA

The Euro initially tried to rally during the trading session on Tuesday but gave back the gains to break down and show signs of weakness. The 200 day EMA above continues to offer significant resistance, and the fact that we pulled back from there is not a huge surprise, especially considering just how over bought we had been for so long. Because of this, I think it is only a matter of time before we have to pull back towards at least the 50 day EMA, perhaps even down to the 1.18 level underneath.

EUR/USD Video 08.09.21

Granted, the Euro has been strong, and you could make an argument for a trend change, but we have not pulled back at all on the way up here, so this is what we need. If we break above the shooting star from last Friday, then we could go looking towards the 1.20 handle. That is an area that of course would attract a lot of attention due to the big figure, but we have a long way to go before we get anywhere near that. I suspect that the healthier option is for the market to go lower and find buyers underneath. After all, the market cannot go in one direction forever.

Pay close attention to the US dollar in general because the greenback will be the main driver of where we go next. In fact, this is probably the easiest way to express your view on the dollar, because of the fact that the US Dollar Index is not always available with all brokers, and then of course the biggest currency part of that basket is the Euro itself.

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