EUR/USD Price Forecast – Euro Trying to Stabilize

The Euro has rallied a bit during the course of the trading session on Wednesday as CPI numbers came out of the United States. Because of this, there was a lot of volatility but at the end of the day the announcement ended up being roughly what people had anticipated. With that being the case, we rallied a bit as inflation does not seem to be running away, but at the same time there is still a strengthening US dollar to pay attention to due to the fact that the yields in America are still much higher than they are in Germany for the rest of the European Union for that matter.

EUR/USD Video 12.08.21

The 1.17 level underneath has offered support, but I think that the market is very likely to continue to fade rallies at the first signs of exhaustion. Just above, the 1.1850 level is a massive resistance barrier that I think will be very difficult to overcome, but quite frankly a little bit of a short-term bounce could be in the cards, due to the fact that the market had been so oversold, and of course markets do not go in one direction forever. On the other hand, if we do continue to drop and break down below the lows of the trading session on Wednesday, then it opens up a move down to the 1.16 level underneath which is a massive support level that extends down to the 1.15 handle.

I think the only thing you can count on is a bit of noise, but you need to pay attention to the bond rate differential between the two economies, and of course you should also pay attention to risk appetite as well.

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