EUR/USD Forecast – Euro Continues to Chop

EUR/USD Forecast Video for 24-01-2024

Euro vs US Dollar Technical Analysis

The Euro dollar did almost nothing during the trading session on Tuesday again, dancing back and forth around the 50 day EMA seems to be what the market is comfortable doing. With that being the case, I think you have to look forward to some type of impulsive candlestick in order to get involved. After all, this pair is the most heavily traded pair in the world and therefore, you look at it as a sign of what the overall risk appetite is doing.

Right now, it just doesn’t look like anybody’s willing to put a lot of money into the market. If that’s going to be the case, that’s fine, but we also need to be cognizant that markets cannot sit still forever, and eventually we will get an impulsive move either higher or lower. If we break to the upside, the 1.10 level above should continue to be a bit of a ceiling, while the 200-day EMA could be a bit of a floor to the downside, followed very quickly by the 1.0750 level.

As we are in the middle of a larger consolidation phase between 1.10 and 1.0750, I think you have a situation where we are essentially at fair value. That might be part of what’s going on. However, we will have to wait and see what transpires over the next couple of weeks in order to discern what might happen next at this point in time.

Traders around the world are trying to weigh whether or not there is going to be interest rate cuts coming out of the ECB now due to the fact that Germany has entered a recession. On the other hand, the Federal Reserve is expected to cut in 2024, but quite frankly, that’s a known situation that probably isn’t moving the market much. For what it’s worth, the Fed funds futures rate has dropped, meaning that people no longer expect a March rate cut as a sure thing out of the Federal Reserve, the number it’s closer to 50%. So that’s part of what’s going on as well.

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