EUR/USD Weekly Forecast – Euro Reaches Major Barrier

EUR/USD Forecast Video for 26.12.23

Euro vs US Dollar Weekly Technical Analysis

The euro has shown itself to be very positive during the course of the week to reach the 1.10 level. This is an area that obviously is a large, round, psychologically significant figure, and an area that features the 200-Week EMA. As we go into the Christmas week, I think you have to worry about liquidity, but at this point I think it’s also becoming very obvious that short-term pullbacks are buying opportunities.

Breaking above the top the candlestick opens up the possibility of a move to the 1.1250 level above, which was where we had sold off from quite drastically earlier in the year. I think we are going to test that area, as the Federal Reserve has moved the dots on the dot plot to suggest that perhaps we are going to see several cuts next year. If that’s going to be the case, then it should continue to weaken the US dollar.

The European Central Bank has recently suggested that it was going to stay tight with its monetary policy, so this does of course influence this pair quite drastically. Having said that, one thing that could be a fly in the ointment so to speak is if we see a major financial issue, because if we do, traders will run to the US dollar for safety. That being said, we are in a major resistance barrier so I am looking for a pullback to buy on some type of value proposition. You probably have to do so on shorter timeframe charts, and of course next week will be very illiquid as most traders will be paying attention to the holidays.

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