EUR/USD Weekly Forecast – Euro Gives Up Early Gains for the Week

EUR/USD Forecast Video for 18.09.23

Euro vs US Dollar Weekly Technical Analysis

The euro has attempted to rally initially during the course of the week, reaching the 50-Week EMA. However, we have seen the market fall since then, and of course the ECB rate decision and dovish tone after the decision did not help the situation as it looks like the European Union is heading into a recession. At this point, the 1.05 level is an initial target, and if we break down below that level, I think it’s possible that the euro could trade at $1.02 relatively soon.

Ultimately, it looks as if interest rates are going to continue to rise in the bond market in America, that of course comes into play as well. Furthermore, we already have finance ministers from a couple of different European countries who have already started complaining about the interest rate hike, and therefore I think we probably have a situation where there is some type of showdown in the European Union coming.

If we could break above the 1.08 level, then we could see a complete turnaround in this market, but right now I think that’s probably somewhat unrealistic. We would need to see the central banks in both Europe and the United States change overall attitudes. Most traders believe that the European Central Bank is closer to turning its monetary policy around than the Federal Reserve, and you are seeing that play out on this chart. Any rally at this point in time has to be looked at with suspicion, and a “fade the rally” type of situation is going to continue to be the same from now on. All things being equal, I think that’s the play going forward.

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