EUR/USD Price Forecast – Euro pulls back

The Euro initially rallied a bit during the trading session on Friday but pulled back a bit to show signs of confusion and exhaustion.
Christopher Lewis
EUR/USD daily chart, March 18, 2019

The Euro rallied a bit during the trading session on Friday, but then pulled back from the 1.1333 handle. The 50 day EMA has caused a bit of resistance yet again, as we continue to struggle to continue going higher. If we can break above the top of the candle stick from the Wednesday, Thursday, and now Friday sessions, then it’s very likely that we will continue to go higher. Looking at this chart, it does seem as if we have plenty of support underneath, extending down towards the 1.12 handle. That being the case, it’s very likely that we are going to see more of a “value hunting” attitude in this market.

EUR/USD Video 18.03.19

Keep in mind that the European Central Bank has taken rate hikes off the table for at least a year, and then possibly even longer than that. However, on the other side of the equation we have the Federal Reserve that looks very unlikely to get tight anytime soon as well. In other words, this is a market that is basically a fight between two very soft and weak central banks. With that being the case, expect more of the same although it does look like we are a little bit softer overall after the ECB press conference, but in the end I doubt that we get a significant break down below the crucial 1.12 handle. The 61.8% Fibonacci retracement level sits at the 1.12 handle, and that of course will attract a lot of attention. There is serious structural support just below, so at this point I like buying the dips for short-term trades.

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