EUR/USD Price Forecast – Euro Gives Up Early Gains

The Euro is initially trying to rally during the trading session on Wednesday, but it has turned around to show signs of weakness. All things been equal, looks like we are trying to form some type of triangle that could break in one direction or the other. That being said, the Federal Reserve has a meeting and an announcement to come out at the end of the session, giving us an idea as to what is going to happen as far as tapering is concerned. This obviously is a huge deal for the US dollar longer term, so it will be interesting to see whether or not they are going to accelerate. If they do, that will be very bullish for the US dollar.

EUR/USD Video 16.12.21

On the other hand, if we rally from here the Euro will not prove itself until we can break above the 1.1375 handle. At that point, we would be challenging the 50 day EMA as well, which of course has a certain amount of importance for technical analysts. The market continues to see a lot of noisy behavior, but it certainly looks as if we are trying to break down. If Jerome Powell increases that taper rate, this market will almost certainly race towards the 1.10 level to the downside. To the upside, if we were to break above the 50 day EMA, then it is likely that we go looking towards the 1.15 level above. All things been equal, the most important thing to pay attention to is we are in a downtrend and that has not changed.

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