EUR/USD Forecast – Euro Continues to Look Rudderless

Euro vs US Dollar Technical Analysis

The Euro has pulled back a bit during the early hours on Tuesday, but it looks like we are fairly well supported, especially around the 1.07 level. The market had gapped higher to kick off the week pulled back a bit, filled that gap, and now it looks like it’s ready for what a lot of traders would refer to as a gap and go play. It gaps, it takes off, and then later on, the buyers come back in to pick it up. Whether or not that actually happens, we’ll have to wait and see, but it’s probably worth noting that bond yields are rising pretty much everywhere, and eventually that could be a reason for the US dollar to strengthen.

When you zoom out, you can see just how choppy the euro’s been all year. And I don’t think that changes. I think we continue to go back and forth between big figures like 1.07 and 1.08 with the exception of the idea that occasionally we will consolidate just in that general vicinity of a big figure, like we had seen around 1.07 over the last couple of weeks.

I think this remains a very short-term type of environment, and if that’s going to be the case, you have to temper your expectations for bigger moves. Summer is quite often somewhat in the doldrums anyway, so all of this lines up for a potential bounce, but I wouldn’t necessarily think that it’s going to change the overall attitude of the markets in general. The euro is one of the choppiest currency pairs out there, and I think this continues to see a lot of indecision. The interest rates will continue to play their part, and as a result, I remain more or less neutral and as a result, this is a market that you need to be nimble in.

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