Euro Continues to Show Signs of Weakness

Euro vs US Dollar Technical Analysis

The Euro has rallied a bit during the trading session on Friday to show signs of life, as the 1.05 level has caused a little bit of psychological resistance to selling pressure. That being said, the market is going to continue to see a lot of downward pressure over the longer term, as the European Central Bank is stuck with an economy that has to worry about energy and recession problems. Ultimately, I think this is a market that will find a way to break through the 1.05 level, although it could take a couple of attempts.

Short-term bounces could be a feature of this market, but those should end up being opportunities to pick up “cheap US dollars.” I have no interest in trying to buy the Euro, and I do believe that there is a lot of fear out there that should continue to drive this market much lower. The 1.08 level above should offer significant resistance, as it was significant support previously. The 50 Day EMA is currently racing to that same level as well, so it gives me even more of a reason to think that perhaps it will be important before it is all said and done.

The market will continue to be one that focuses on the divergence between the two central banks, as we have so much in the way of negativity coming out of Europe, and hawkish behavior coming out of the United States. As long as this is going to be the case, there is no reason to think the trend changes.

EUR/USD Price Forecast Video 02.05.22

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