EUR/USD Weekly Forecast – Euro Falls to Test Major Trend Line

EUR/USD Forecast Video for 21.08.23

Euro vs US Dollar Weekly Technical Analysis

The euro has fallen during the course of the week to show signs of negativity yet again, but it is sitting on top of a major trend line. Furthermore, the 50-Week EMA sits just below, and that of course is something that people will be paying close attention to.

If we break down through all of that, then it could open up a significant amount of selling pressure on the euro, and perhaps have everybody running for the US dollar. That does look like it could very well happen, but we need to pay close attention to the 1.08 level and of course that 50-Week EMA. If those hold, then it’s likely that we continue the overall consolidation that we have seen. On the other hand, if we turn around and break above the top of the candlestick for the week, that would be a very bullish sign and I think the Euro could go looking to the 1.1250 level.

Either way, I would anticipate a lot of choppy behavior as we are in the end of the summer season, meaning that most traders are probably away on vacation to begin with. This tends to be a time of very low liquidity, so it either means that we don’t do much, or we do an extraordinary amount of movement due to thin conditions. In other words, you need to be very cautious with your position sizing as it can be a dangerous scenario. Ultimately, this is all about capital preservation in the end, and of course once we get into the middle of September, things will start to pick up from a volume standpoint, thereby allowing more stability in the market.

Pay close attention to the bond market, because it does continue to see higher rates in the United States, which of course can cause major problems. This could be a very important close on the weekly chart, so I will be watching this very closely as to where we end up.

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