Euro Gaps Higher to Kick Off the Week

Euro vs US Dollar Technical Analysis

The Euro has gapped higher to kick off the trading session on Monday. This came after the market had closed right at major support on Friday. By doing so, the market has shown itself to be at a major inflection point, and therefore it is likely that we will continue to see a lot of noisy behavior, as it shows that the 1.08 level continues to be a major support region. Any rally at this point in time would more likely than not offer a shorting opportunity at the first signs of exhaustion. In that scenario, I am more than willing to sell the Euro yet again.

The 50 Day EMA has just broken below the 1.11 level and is starting to drop rather significantly. At this point, I would anticipate that the 50 Day EMA will be dynamic resistance. In fact, is not until we break above the 1.12 level on a daily close that I would consider buying. Until then, I look at this as a “fade the rallies” type of situation, and therefore I think this is a market that if you step back a bit, you should get a nice opportunity. The US dollar continues to look very strong from a longer-term perspective, but markets cannot go in one direction forever.

If we do break down below the 1.08 area, the market could drop down to the 1.05 handle, but I believe there is a lot of noise between those two levels, so you should keep in mind that it would not necessarily be a major fall off, but more or less a grind lower.

EUR/USD Price Forecast Video 12.04.22

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