EUR USD Price Forecast – Euro Finds Buyers After Huge Dip

The Euro initially fell rather significantly during the course of the trading session on Wednesday after the CPI numbers in the United States came out much hotter than anticipated. Because of this, it looks as if we are seen a bit of an algorithmic trading due to the fact that it turned around so quickly. In fact, the Euro has taken out to the upside rather quickly after the initial knee-jerk reaction, and this tells me that the Euro will eventually go much higher.

EUR/USD Video 13.05.21

Looking at the reaction, this tells you everything you need to know, as traders still believe the Federal Reserve when the idea of inflation being transitory is how they look into the future. If that is going to be the case, then it is very unlikely that the Federal Reserve is going to tighten anytime soon, and most certainly the European Central Bank is on the sidelines as well. With this, I think will continue to look at the idea of buying dips in this pair until we can get to the 1.22 handle, possibly even the 1.23 level.

Underneath, the 1.20 handle is significant support from everything I see, not only due to the fact that it is a large, round, psychologically significant figure, but I also recognize that the 50 day EMA turning higher at that level and of course the structural bounce that we have seen there both give us a couple of reasons to think that buyers are waiting if we do get somewhere close to that region. I do not necessarily think we are though, lease not based upon the reaction to the CPI numbers that I have seen.

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