EUR/USD Forecast – Euro Bounces Into The New Year

EUR/USD Forecast Video for 02-01-2024

Euro vs US Dollar Technical Analysis

Taking a look at the Euro against the dollar and you can see that we did pull back just a bit during the trading session here on Friday, but it looks like the buyers are going to keep this somewhat elevated and with the result of that, I believe that we are probably going to head into more consolidation than anything else. After all, it’s the very end of the year and as we roll into a new year, a lot of traders are trying to square their positions underneath the 1.10 level continues to be an area of interest as it had previously been resistance, but now is support in what is called market memory. And therefore, I think you have to watch that level if we get anywhere near there.

Breaking down below there doesn’t necessarily facilitate a major breakdown, it just suggests that perhaps we will have to try again to find buyers at 1.09. On the upside, I see the 1.11 level as an area of potential short-term resistance, but ultimately, I still believe that the euro is going to go looking to reach the 1.1250 level. I think it’s going to take some time to get there, but eventually that is an area that has to be tested from everything that I see.

It is in that area that I think we have a major battle just waiting to happen as the 61.8% Fibonacci retracement level will be found there from the sell-off from a couple of years ago. In general, this is going to be about interest rates, so pay close attention to the 10-year yield in the United States. As it falls, that pushes this higher, and of course vice versa. The one caveat to this is sometimes interest rates drop in a bit of a “panic bid” for safety, which could not only send rates lower in the United States, but the US dollar higher. Having said that, at the moment it does not look like there’s anything on the horizon for the cause.

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