EUR/USD Price Forecast – Euro Pulls Back From Major Level

The Euro ran into trouble at the 1.12 level, which is an area that should attract a lot of attention due to the fact that it is a large, round, psychologically significant figure. Beyond that, it is also an area where we have seen selling previously. Essentially, it has worked out as the top of an overall consolidation area, so therefore there should be no surprise that it causes issues. To the downside, the 200 day EMA is currently sitting at the 1.1150 level, so I think this market will continue to be very tight.

EUR/USD Forecast Video 08.01.20

All things being equal, the market should continue to be very noisy, and I think at this point the market is trying to decide whether or not it can change the overall trend. We are sitting above the 200 day EMA so in theory it should send this market higher, but if we were to break above the shooting star from several days ago, then the market could go towards the 1.14 handle above. To the downside, if the market breaks down below the 200 day EMA, the market could go down to the 1.1075 handle, which is roughly where the 50 day EMA is sitting. Breaking down below there would of course kill the idea of a trend change to the upside. At this point, expect a lot of choppy volatility so it is best to trade with small positions until we get the clarity that we need in order to be confident.

Please let us know what you think in the comments below