EUR/USD Price Forecast – Euro Sitting on Top of 50 Day EMA

The Euro has dipped slightly against the US dollar during the trading session on Thursday but still hangs on to the 50 day EMA. Furthermore, the 1.20 level has been important in the past and I think it extends support all the way down to the 1.19 level. If we were to break down below there then you could start to talk about shorting this pair, but until then it looks very likely to stay within the range that we are currently trading at.

EUR/USD Video 29.01.21

That range is determined by the 1.20 level on the bottom, and the 1.23 level on the top. I simply do not see an argument for this pair to break out of that range in the short term, mainly due to the fact that the Federal Reserve is so loose with its monetary policy, while the European Central Bank is now starting to publicly complain about the exchange rate. In other words, we may have a little bit of a push and pull currency war brewing here. Currency wars meaning that both central banks are trying to devalue the currency so that they can increase exports, but if both are doing it at the same time it typically means that nobody wins.

Furthermore, there are a lot of concerns about the world after the virus, because quite frankly the vaccination programs are not moving along as quickly as once hoped. Because of this, I think we may have a bit of choppiness in the meantime but once we get a handle on all of that then I would anticipate the US dollar to continue falling. Being oversold could provide a little bit of relief in the short term.

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