EUR/USD Forecast – Euro Continues to Bounce Around

Euro vs US Dollar Technical Analysis

The Euro has gapped higher to show signs of strength before rallying a bit and then pulling back. The Monday session, of course, is mainly a reaction, I believe at least, to the French elections and what that may or may not mean. The euro also is probably just simply going to bounce around in the same general vicinity that we have been, and you can see that we’re already starting to pull back from the gap higher. We basically have been moving from one large round figure to another for what seems like a lifetime now and in reality, it’s been something like 18 months. This is a sideways market in its core, as is typical for this pair overall.

And I think that will just be what we do going forward. If we fall significantly from here, the 1.07 level will be tested. If we turn around at the gap and start rallying, then the 1.08 level will more likely than not be tested. The gap was filled earlier in the day, so we’ll have to wait and see if it holds again. But if we do turn around and rally, I believe that the 1.08 level could very well end up being a target. The main driver beyond the noise in Europe of course is going to be the bond market in the United States so watch those yields as they start to rise again. That will be very dollar positive.

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