EUR/USD Forecast – Euro Continues to Grind Lower

Euro vs US Dollar Technical Analysis

The Euro fell a bit during the trading session on Wednesday as it looks like we are trying to see a bit of a recovery from the attempt at breaking higher. After all, the US dollar is the preferred currency at the moment and of course we have to look at the fact that the European Central Bank is likely to cut much sooner than the Federal Reserve. Because of this, it does make sense that the US dollar would be stronger. And then, of course, let us not forget, we had been in a pretty nasty downtrend previously to get down to these levels.

The 1.07 level underneath could be a target. If we break down below there, then we could go look into the 1.06 level. I don’t necessarily think that there’s some major meltdown coming, just that the interest rate differential and of course the geopolitical concerns around the world certainly favor the greenback over the Euro. And with that being the case, I just don’t see an idea here of going long, at least not until we break above the wipeout candle from a couple of weeks ago, meaning that we’d have to be above 1.0875.

At that point, we could go to the 1.10 level, but that would take a lot of US dollar weakness probably across the board. It wouldn’t just be here. With that being said I use the euro as a proxy for the US dollar index. It’s not really a currency pair that’s worth trading. It really doesn’t move most of the time. However, what it does do is it gives you a heads up as to what’s going on with the US dollar, which if you get that right, you’ll get most of the Forex market right.

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