EUR/USD Weekly Forecast – Euro Tests the Top of The Flag

EUR/USD Forecast Video for 06.11.23

Euro vs US Dollar Weekly Technical Analysis

The euro initially fell during the week, but then turned around to show signs of life on Friday after the jobs numbers came out weaker than anticipated in the United States. Because of this, the market then started to rally toward the top of the bearish flag, and then of course the 50-Week EMA. At this point, the question is whether or not we will continue to go higher, or if it is a “fade the rally” type of situation. All things being equal, this is a market that I do think falls further, but we also need to pay close attention to what price is doing, not what it “should do.”

The 1.05 level underneath is a major support level, and if we were to break down below there, it opens up massive selling. At that point, we would be looking at a move to the 1.0250 level, and then possibly the parity level. On the other hand, if the market were to break above the 50-Week EMA, then we could have a move toward the 1.09 level. That being said, the market is likely to see a lot of noisy behavior in this area, so I think we are in an area that could be very difficult to trade.

The European Central Bank is likely to loosen its monetary policy much quicker than the Federal Reserve, I think that’s what will drive this market more than anything else in the longer term, so although we’ve had a very bullish week, I don’t necessarily think it has changed much from a longer-term standpoint, at least not yet.

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