EUR/USD Price Forecast – Euro Pulls Back Towards 50 Day EMA

The Euro has fallen a bit during the trading session on Friday to reach down towards the 50 day EMA again. After forming a couple of shooting stars, it is very likely that the market was always going to fall. Having said that, the market looks as if there are buyers underneath waiting to get involved, as we have bounced significantly from the 1.20 level, an area that of course is a large, round, psychologically significant figure, and major structural support as well.

EUR/USD Video 15.02.21

To the upside, the 1.23 level above extends to the 1.25 handle, offering a massive amount of resistance. In other words, I think that this market simply goes back and forth in general between these areas, because I think that the Euro will continue to go back and forth based upon the idea of the US stimulus package. The US stimulus package appears as if it is going to be $1.9 trillion, and that the Democrats are going to ram it through Congress. If that is the case, it should work against the value of the dollar.

However, one thing that you need to worry about is that the markets are trying to price in the idea of higher interest rates out of America, so that does put a little bit of a drag on the uptrend. This is what I think we go back and forth overall, because we are going back and forth between that argument and the idea of the European Union is struggling with the coronavirus vaccinations being rolled out. Furthermore, there are lockdowns in the EU, so it comes down to whether or not traders are willing to look past it.

For a look at all of today’s economic events, check out our economic calendar.