Euro Continues to Struggle

Euro vs US Dollar Weekly Technical Analysis

The Euro initially shot higher during the course of the trading week but has struggled near the crucial 1.12 level to form a rather ugly candlestick. By doing so, the market looks as if it is trying to figure out where to go next. Keep in mind that the pair is going to pay close attention to the interest rate differential, but it will also pay close attention to the lack of growth in the European Union.

We have been in a downtrend for quite some time, so is not a huge surprise to see that the buyers would become a bit skittish at the first signs of trouble. With Germany bringing down its GDP estimates, that does not believe much hope for the European economy in the foreseeable future.

The Federal Reserve remains hawkish, while the European Central Bank is probably stuck with an ultra-loose monetary policy as far as the eye can see. If that is going to be the case, then there is no reason to think that this pair will rally with any significance. With that in mind, short-term traders continue to fade rallies as they occur. However, the longer-term trader needs to pay close attention to the support underneath at the 1.0850 level. This is an area that will continue to attract a certain amount of attention considering we had bounced quite nicely from there, and it has historical precedence.

In the meantime, I suspect that this is probably more or less easier to trade from the short term, using the 1.0850 level as a guide rail on the bottom, and the 1.12 level as a guide rail on the top. Anything beyond that would be a bit of wishful thinking unless of course, we got some type of fundamental shift that took the headlines.

EUR/USD Weekly Price Forecast 04.04.22

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