EUR/USD Forecast – Euro Breaks Down Through Trendline

EUR/USD Forecast Video for 06.09.23

Euro vs US Dollar Technical Analysis

The euro broke down during the trading session on Tuesday, slicing through the major trendline. By doing so, the market is likely to continue to see downward pressure, as the US dollar is like a wrecking ball to almost everything. At this point, it will be interesting to see whether or not we can go down to the 1.05 level. That’s an area that I think a lot of people will be paying close attention to, and if we were to break down below there, then it’s likely that we could go much lower.

On the other hand, if we turn around and take out the 200-Day EMA to the upside, the market could go much higher, perhaps racing toward the 50-Day EMA. That being said, the market is likely to continue to be somewhat negative though, especially as we have to worry about the Federal Reserve, and this week could be very interesting due to the fact that we have seen summer come and go, and now the real liquidity comes back into the picture as traders come back from the vacation season.

Regardless, I do think that this is going to be a very noisy week, and therefore you need to be cautious but it certainly looks like we are trying to break down from here, and the issues that we are undoubtedly going to see in the European Union this winter with energy won’t help anything. Germany is in a recession, while the United States continues to be much stronger, and at least relatively speaking is outperforming the EU.

As long that’s going to be the case, then the euro will continue to suffer at the hands of the greenback, and if we start to see more of a run toward safety, which we very well could, that will add more downward pressure here. With that being the case, as things stand right now I believe that it is a “fade the rally” type of scenario, at least until we can recapture the 200-Day EMA on a daily candlestick. If that were to happen, we could change some things but right now it doesn’t look like it’s going to be very likely.

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