EUR/USD Weekly Price Forecast – Euro Exposed to The Upside

The Euro has exploded to the upside over the last week, or last two weeks for that matter. The Fed Funds Rate futures market has dictated a 50 basis point cut previously, and then it looks as if it is still dictating another 50 basis point cut. At this point, the market is very likely changing the overall trend, and at this point I think a short-term pullback is warranted in order for people to get involved again. At this point, the market is likely to be overstretched and it’s very likely that the Euro will give back some of the gains. Having said that though, if we can get a pull back towards the 1.1250 level, or perhaps even the 1.12 level, then buyers will certainly come back in and those who are short of this pair will bail on the trade.

EUR/USD Video 09.03.20

The alternate scenario is that we simply break out from here, but it is very difficult to chase the trade that has moved 700 PIP so quickly. The 1.15 level above is significant resistance, and once we turn things back around, I suspect that we will get a grind higher for some time. The 50 basis point interest-rate cut is still be in price then, and as a result we should continue to see this grind North. Pay attention to the pair to give you an idea of the US dollar strength or weakness in general, and in the meantime even though this has been the biggest mover, this could open up opportunities in other currency pairs to short the US dollar as well.