EUR/USD Forecast – Euro Attempts to Recover

EUR/USD Forecast Video for 17.10.23

Euro vs US Dollar Technical Analysis

The euro initially tried to rally during the session on Monday, as the 1.05 level continues to be very important. The 1.05 level is of course a large, round, psychologically significant figure, and an area where traders will be paying close attention. If we were to break down below there, it’s very likely that the Euro continues to fall, and will almost certainly make a fresh, new low. The market then goes looking to the 1.0250 level, and then possibly as low as the parity level.

Keep in mind that the European Union is likely to head into a significant recession, and that of course won’t do any favors for the currency. That being said, you also need to pay close attention to the US interest rate markets, because if they start to fall, that could make the Euro more attractive, or at least “less bad” than it once was.

It doesn’t take too much imagination to suggest that the market is in a bearish flag at the moment, so that’s probably something worth paying attention to as well. Ultimately, the market looks as if it is going to try to continue breaking down eventually, but in the short term it looks like we might be a little bit choppy as we are waiting on a handful of economic announcements this week.

Regardless, it’s not until we break above the 1.0650 level that I would suggest that perhaps the correction is a bit more impressive. Until then, it looks like every time the market rallies, there will probably be sellers waiting to get involved. It’s also worth noting that just above the recent swing high we have the 50-Day EMA which will also attract a certain amount of technical resistance as well.

Expect a lot of noisy behavior, but I believe at this point you still have to look at it through the prism of the selling pressure being much more prevalent than buying pressure. Sure, we could get the occasional correction, but more likely than not, we will have more of a sustained negative attitude in this market unless something fundamentally changes. Looking to fade rallies will be the way I play this market going forward.

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