EUR/USD Forecast – Euro Continues to Bounce Around in The Same Region

EUR/USD Forecast Video for 12-01-2024

Euro vs US Dollar Technical Analysis

We have been all over the place during the trading session on Thursday, as we got the consumer price index numbers coming out of the United States, basically about where they were predicted to be. And it appears by the reaction, at least the initial reaction, is that traders may have thought that inflation was going to cool off. And if that’s the case, they were probably looking for a number that would make the Federal Reserve more likely to cut rates.

They haven’t really got that, so we’ll have to wait and see how that plays out. But right now, the 1.10 level above continues to be a major barrier. If we can break above that, then it opens up a move to the 1.1140 level, which is where we’ve seen some resistance previously. Underneath, we have the 50-day EMA offering a bit of support and I do think that a lot of people will be paying close attention to it. Breaking down below the 50 day EMA opens up the possibility of a move down to the 200 day EMA. In general, I think we’re just going to continue to consolidate.

I don’t know that the markets have any real conviction about anything right now. So, with that being the case, I think you’ve got a situation where we bounce around in this area. But as soon as we break out of these areas, then you’ve got a really good shot at having a bigger trade. Obviously, the US dollar itself will be the currency to pay the most attention to, so look across the Forex world to see how it’s behaving. It will probably show you where this pair is going to go.

Make sure you’re very cautious with your position sizing, but despite the fact that we have had a lot of noise out there, I do think that not much has changed from the longer-term outlook, at least not quite yet. The Producer Price Index on Friday could have something to say as well, but ultimately I think we are still trying to sort out what to do with ourselves.

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