EUR/USD Weekly Price Forecast – Euro Slams Into Parity Again

Euro vs US Dollar Weekly Technical Analysis

The Euro has rallied rather significantly during the week, as the ECB raised rates to the level of 2%. Having said that, we have turned around since then and it looks as if we are ready to continue the downtrend sooner or later. It’s worth noting that the market slammed directly into a major trend line, so it does make a certain amount of sense that we continue to see selling pressure.

Furthermore, you need to keep in mind that there is a lot of risk appetite destruction out there, and that typically means that people will be looking toward the greenback for safety. Parity was broken through, but the market has pulled back through that level to the downside again, suggesting that the downtrend should continue. If we were to break above the 1.01 level, that would be a short-term bullish signal, but I just don’t see how this changes from a longer-term standpoint.

Inflation is an issue in the European Union, but they also have major problems when it comes to growth. In other words, there’s not a lot that the ECB can do, and the print by Germany of 11% inflation on Friday will do nothing to help the idea of the European Union strength. Because of the noise out there, I perfer to simply sell this market on bounces, at least until economic conditions change. Also, keep in mind that Wednesday of next week will feature the statement by the Fed, and if the central bank sounds very hawkish, it is likely that we will see the USD strengthen over the longer-term.

The 0.95 level could be targeted, but the ‘easy money’ on the downside has already been made. Because of this, we need to be a bit more nimble than in the past, and recognize that the markets, are not the same as they were just a few months ago. However, they remain bearish and very pro-dollar.

EUR/USD Price Forecast Video for 31.10.22

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