EUR/USD Price Forecast – Euro Looks Firm on Shallow Pull Back

The Euro pulled back just a bit heading into the weekend on Friday but remain somewhat firm due to the fact that it seems to be unwilling to fall for a significant amount of losses. With that being the case, I do think that it is only a matter of time before we continue to the upside, perhaps reaching towards 1.23 level. The question here is not so much as to whether or not the Euro can continue to go higher but whether or not it might need to pullback first? At this point it looks like we may be in a situation where it is simply going to grind sideways in work off some of the excess, which of course is quite normal as well.

EUR/USD Video 21.12.20

Ultimately, this is a market that I do not like shorting, but I see where we could drop to the 1.2150 level in a typical and normal pullback. Because of this, I would be very cautious about trying to short this market, even if we do reach towards that level because I believe that there are plenty of people there waiting to pick up the Euro as they have missed out on the trade.

Furthermore, we have stimulus coming from the United States sooner or later and that continues to weigh upon the greenback as well. Do not get me wrong, I do not necessarily think the Euro is going to be the strongest currency out there, but it certainly will outperform the US dollar over the longer term. Most traders agree that the Euro could be heading towards 1.25 handle, but keep in mind that as we start the week, we will be heading into holiday liquidity issues.

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