EUR/USD Price Forecast – Euro Finding Support Again

The Euro initially pulled back a bit during the trading session on Friday to show signs of weakness but continues to hang on to the 50 day EMA. When I look at this chart, the market is likely to continue to look at the 1.20 level underneath as support that extends down to the 1.19 level, while the 1.23 level above is significant resistance that extends to the 1.25 handle. Ultimately, there are a lot of varying reasons to think that this market may struggle a bit, but at this point in time I think there is more confusion than anything else.

EUR/USD Video 01.02.21

The European Central Bank has recently suggested that they are willing to loosen monetary policy even further, directly countering the Federal Reserve and its ultra-loose monetary policy. With this being the case, it is likely going to be a lot of back and forth action trying to figure out what to do next. In this environment, we could be talking about the lack of momentum as the main story here. Ultimately, I do think that we will make a bigger decision, but we could be looking at this area as the overall market for the next couple of months.

Using a range bound system is probably going to be the best way forward but recognizing that if we break out of this area, it could lead to a much bigger move. At this point, I think that if you are more apt to trade short term, this might be an excellent pair to be involved in.

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