EUR/USD Forecast – Euro Continues to Look For Momentum

EUR/USD Forecast Video for 30-01-2024

Euro vs US Dollar Technical Analysis

The Euro has been somewhat choppy during the early hours on Monday, which is probably to be expected for a multitude of reasons. The first reason of course would be the fact that the 200-day EMA sits just below, and a lot of traders will more likely than not pay close attention to it.

Furthermore, we also have the 1.08 level right around the same area, so it all ties together quite nicely for a potential support region. Underneath there, we have the 1.0750 level, which was the latest swing low and a previous resistance barrier that I think a lot of market memory will show up at. Beyond all of that, we have the FOMC meeting on Wednesday, which will have a major influence on what happens with the US dollar.

Keep in mind that the European Central Bank is going to have to deal with a recession in Germany and therefore I think the Euro may begin to lose a little bit of its luster, but right now it’s more or less a fade the rally type of market. Granted, we are in a larger consolidation area that extends all the way to the 1.10 level, so be aware of that as well.

However, some pundits out there are pressing for the idea of the euro becoming a funding currency. So you would short the euro and buy other currencies with it, preferably higher yielding currencies, such as the Mexican peso, commodity currencies, etcetera. That being said, you would want to watch the euro against the dollar anyway, because it’s the purest way to see how the euro is behaving.

All things being equal, I don’t like the euro, but I’m not necessarily going to get too big in one direction or the other right now. I think it’s more or less neutral in the short term. But eventually, the ECB will open the door to interest rate cuts, as Germany being in a recession will more likely than not bring the rest of the EU down with it.

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