EUR/USD Price Forecast – Euro Runs Into Headwinds

The Euro initially tried to rally during the trading session on Thursday, but as you can see, we gave back the gains rather quickly. Ultimately, this is a market that continues to see a bit of choppy behavior, but I think eventually we have to make a longer-term decision. The 1.23 level above is significant resistance, so it is possible that we will try to make a move towards their after the holidays, but whether or not we can break above there might be a completely different question.

EUR/USD Video 28.12.20

As things stand right now, there does seem to be a desire to punish the US dollar for all of the stimulus, but one would also want to see better economic performance coming out on the European Union in order to get excited about owning the Euro. With this being the case, I anticipate that we are going to continue to go back and forth in this general vicinity for the next couple of weeks. Eventually, traders will start to put money to work after the New Year holiday, but we have a couple of clear boundaries that we need to pay attention to.

The 1.20 level underneath should be supportive as we have the 50 day EMA reaching towards it, just as the previously mentioned 1.23 level should be resistance, perhaps extending to the 1.25 handle. I do think that we probably have more of a proclivity to go higher more than anything else. At this point, the market does look a little exhausted so do not be surprised on some type of pullback. However, the pullback should offer a bit of value.

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