EUR/USD Price Forecast – Euro Shows Signs of Stability

The Euro has gone back and forth during the trading session on Thursday as we are showing signs of stability after a horrible day on Wednesday. At this point in time, the market looks as if it is going to grind back and forth, and perhaps even drift a little bit lower before finding even more bullish pressure. The 1.17 level underneath will continue to be very important, and I look at it is a hard floor in the market. Ultimately, the market breaking down below there could open up the move towards the 1.15 handle, but right now I do not see that happening without some type of catalyst. In general, the market continues to be very noisy, but the main driver of course will be the Federal Reserve.

EUR/USD Video 21.08.20

Speaking of the Federal Reserve, they look very likely to continue liquefying the market, and therefore I think we will continue to see the US dollar lose value over the longer term. Ultimately, I think that we are going to go looking towards the 1.20 level above, which of course is a large, round, psychologically significant figure. A break above there then opens up the possibility for a move towards the 1.25 handle, which is my longer-term target for some time next year.

Ultimately, this is a market that continues to look bullish over the longer term, so therefore I am only looking in one particular direction. The market will continue to see a lot of noise in general, but I think this time of year it is more about people being on vacation, which means that we will see quite a bit of chop more than anything else.

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