EUR/USD Price Forecast – Euro Gives Up Early Gains

The Euro initially tried to rally during the course of the trading session on Thursday but gave back the gains after the ECB was a lot less hawkish than people had anticipated. This is a bit surprising, because central banks around the world continue to be very loose, and are ignoring inflation, so to think that the ECB would be any different was a bit of a stretch. That being said, the 50 day EMA looks as if it is trying to offer a certain amount of resistance, just as the 1.18 level underneath should offer significant support.

EUR/USD Video 10.09.21

If we were to break down below the 1.18 level, it is likely that the market could go looking towards 1.17 level underneath. One thing is for sure, this continues to see a lot of volatility and that press conference coming out of Brussels did nothing to assuage all of the issues. In other words, expect a lot of choppy behavior over the next couple of days, as we continue to go back and forth. I truly wish I could tell you something other than that, but the reality is that the market has no idea what it wants to do.

Looking at this chart, it looks like we have been extraordinarily volatile over the last couple of months as we are forming a bit of a “megaphone pattern”, and therefore it shows just how ridiculous this pair has been. At this point, I think you can count on more chop instead of less. So, keep your position size rather small. There is a really good chance this has more headaches to come.

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