EUR/USD Forecast – Euro Continues to See Overhead Resistance

Euro vs US Dollar Technical Analysis

The Euro rallied slightly during the trading session on Monday in the early hours as we continue to try to fight against the 50 day EMA. The 50 day EMA is just the first issue that you run into because the 200 day EMA sits just above.

If we can break above the top of the candlestick for the wild Friday session, then we could see a move toward the 1.0850 level. On the other hand, if we turn around and start shorting here and the market starts to fall, then the 1.07 level will be targeted. The 1.07 level has been important multiple times and with that being said, 1.07 will be an area I’ll be watching because if we can break down through there to the downside, then it probably will open up a move to the 1.06 level, possibly even down to 1.05. Keep in mind that both of these central banks are likely to cut rates this year.

So, there is a little bit of hesitation to get overly excited about one or the other, but it should be noted that the ECB in Europe is probably cutting first and therefore I still think there’s a little bit more of a downward bias in this pair over the longer term. Whether or not that plays out right away remains to be seen of course, but I certainly think that you’re looking for signs of exhaustion as a more likelihood of outcome here. If we were to break higher and clear the 1.0875 level, then we could go to 1.10, but right now I think you would need to see a general decline in the US dollar to make that happen, something that just doesn’t seem to be sustainable.

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