EUR/USD Price Forecast – Euro Takes Off

The Euro rallied significantly during the trading session after initially pulling back to the 1.15 level before bouncing significantly. With that being the case, the market is likely to find buyers who are suffering from FOMO, and of course the traders who have been short of this currency pair are now sweating bullets, waiting for the market the pullback so they can get out without as much damage to their account as they are seeing right now.

EUR/USD Video 23.07.20

A pullback from here makes quite a bit of sense, as we have moved two handles in less than two days. It is possible that we continue going straight up in the air, but if you are patient you are likely to find “cheap euros” underneath. At this point in time, the $1.14 level is now the absolute “floor” in the market, and I think that the trend has clearly changed. Longer-term, we are going to go looking towards 1.20 level, but that could take a bit of time. All things being equal though, you certainly cannot sell this market as it has continued to see buyers jump into it and of course there is a massive unwinding of US dollar longs that have been in effect for years.

Forex tends to move in multi-year cycles, and I think we just started a new one when it comes to the US dollar, which is most commonly expressed by buying the Euro. The 27 nations coming together and agreeing on some type of federalized coronavirus stimulus is a historic event that shows that the European Union may actually be able to work together for once.

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