EUR/USD Price Forecast – Euro Pulling Back From Overbought Position

The Euro has pulled back again during the trading session on Monday to kick off the week on its back foot. That being said, we had gotten a bit oversold as far as the US dollar is concerned, so it does make a certain amount of sense that this market pulled back. That being said, there is support underneath at multiple levels, so I do not necessarily think that you should be a seller in general. If you are, by all means make sure that your position size is applicable to the idea of trading against the longer-term trend.

EUR/USD Video 12.01.2021

To the downside, I see the 50 day EMA underneath near the 1.2075 level as offering support, just as I see the 1.20 level as it was so important in the past. The Euro is a little bit overdone, but perhaps more importantly that dollar is overdone. When you look at the US Dollar Index, we are sitting on top of major support which of course is typically simply an inverse at this chart as the Euro is such a huge portion of it.

All things being equal, I do think that the buyers come back but right now we may have a little bit further momentum to the downside, but I do think that eventually the longer-term momentum comes back into play. I simply sitting on the sidelines and waiting for an opportunity to take advantage of the market pulling back is probably the way to go, but I would anticipate that the beginning of this week will probably be very choppy.

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