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

EUR/USD Forecast Video for 31.10.23

Euro vs US Dollar Weekly Technical Analysis

The euro initially rallied during the course of the week to test the 1.07 level. This is an area that of course will attract a certain amount of attention as it was supported on the way out, so “market memory” will have come into the picture and pushed the market lower. By the end of the week, we are forming a somewhat negative looking candlestick, as it is a bit of an inverted hammer, and we are in the midst of a bearish flag.

The 1.05 level underneath is a large, round, psychologically significant figure, in an area we have bounced from previously. If we can break down below there, then the market is likely to continue to see a lot of downward pressure, opening up the possibility of a move down to the 1.0250 level. After that, we could go down to the parity level. Short-term rallies continue to get faded, as the geopolitical concerns around the world continue to drive money into the US dollar, and of course you have the higher interest rates in America that make the greenback so much more attractive than the euro. Furthermore, the European Union is likely to head into a major recession over the winter, so therefore it’s likely that you have to look at the euro with a little bit of hesitation as the Europeans will struggle with energy, and economic momentum in general.

If we were to turn around and break above the top of the candlestick for the week, that would obviously be very bullish, perhaps opening up a move to the 1.09 level above. That would be the bottom of that channel we were in previously, but it seems very unlikely that we would do that anytime soon.

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