EUR/USD Forecast – Euro Continues to Consolidate After Big Move

Euro vs US Dollar Technical Analysis

The Euro initially tried to rally a bit during the early hours on Monday but have turned gains back around to show signs of negativity. All things being equal, this is a market that peaked above the 1.12 level, and then turned around to reach towards the 1.11 level underneath, where I expect to see a lot of support. That was a previous high.

And on the other hand, if we do turn around and rally from here, then breaking above the 1.1250 level could very well end up being a target and a gateway to much higher pricing. We’ll have to wait and see. Either way, the euro is a little overbought or maybe more specifically the US dollar is oversold. In this general vicinity, I think you’ve got a situation where the market is likely to continue to see a lot of volatility regardless as both the ECB and the Federal Reserve are likely to cut.

At this point in time, I look at the 1.10 level as a major support level, which was a previous resistance barrier. In general, as long as we can stay above there, then I think the euro is somewhat positive. However, if we were to break down below that 1.10 level, then we probably see a complete change and what I would assume would be a “risk off” environment for the markets overall. After all, there is a lot of noise out there when it comes to the global economy, and of course the actions of central banks. Will they bail out the trading public? Of course they will, but the question will be how to do it?

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