EUR/USD Forecast – Euro Bounces Significantly on Friday

EUR/USD Forecast Video for 29-01-2024

Euro vs US Dollar Technical Analysis

The Euro initially fell during the trading session on Friday but has found the 200 day EMA underneath to be supportive. Now that we have turned around, it looks like we are just simply seeing the same kind of back and forth choppiness that we have dealt with over the last couple of weeks.

All things being equal, the 50 day EMA probably causes a little bit of resistance, but I think the 1.09 level is a little bit more important. Now that we are bouncing around and we are expanding our range, it looks like we are getting a situation where we are starting to pick up momentum and it will be released in one direction or another.

Also, this is a market that looks like we are hanging around in a consolidation range with the 1.10 level above as resistance and the 1.075 as a support level underneath. Everything else being the same, I think we stay in this range mainly due to the fact that the central banks, both the Federal Reserve and the European Central Bank, are likely to loosen monetary policy. Well, the Federal Reserve has started to suggest this for this year.

The ECB has been a little bit more reluctant to do so. However, with Germany heading into a recession, one has to wonder how long would it take for them to be forced to do the same? And I think that’s what the market is trying to sort out right now. So, with that being the case, both are probably somewhat negative, and I think at this point in time we’re just bouncing around trying to sort things out. If we get a major geopolitical event that is risk off, that will certainly help the US dollar. On the other hand, if we suddenly get a huge risk on a type of market, then that should help the euro. Right now, it looks like we’re just trying to grind back and forth and build up enough inertia to make the next big move.

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