EUR/USD Price Forecast – Euro Gets Hammered

The Euro initially tried to rally during the course of the trading session on Tuesday but gave back the gains to crash into the 1.18 level rather quickly. Furthermore, the CPI numbers came out much stronger than anticipated during the early hours in New York, sending the massive amounts of money running towards the US dollar. The Federal Reserve is probably going to have to acknowledge the fact that inflation may be running hotter than anticipated, meaning that the United States will begin tightening much quicker than other central banks around the world, especially the European Central Bank, which has to deal with a lagging European economy.

EUR/USD Video 14.07.21

German factory orders recently have turned decidedly negative, which suggests that the United States will continue to lead the way and therefore we should continue to see a bit of follow-through on the “H pattern” that we recently formed. That of course is a very bearish sign, and I think at this point in time it is likely that we are about to get some follow-through. Whether or not it happens right away might be a different story altogether, we are certainly looking at the US dollar on the verge of a major breakout.

This is especially true when you look at the US Dollar Index, which is testing a major downtrend line. I believe at this point in time we are looking at a major point of inflection, and if that is going to be the case it is likely that we need to be aggressive when this thing finally breaks down, which at this point in time could happen rather quickly.

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