EUR/USD Forecast – Euro Continues to Look Soft

Euro vs US Dollar Technical Analysis

The Euro continued to fall on the four-hour chart here on Tuesday as we continue to look at the possibility of the snap elections in Europe causing a bit of uncertainty, plus we also have the FOMC meeting on Wednesday that obviously will suck all of the oxygen out of the room and therefore I think the US dollar is most definitely in focus at the moment. Underneath the current trading we have the 1.07 level offering support and that might be our short-term target. Above, we have the 1.08 level as resistance, and it is the top of the gap from the open for the week. This typically will be a bit of a magnet for price, at least sooner or later.

So that might be worth paying attention to as well. Longer term, I don’t know that the Euro has anywhere to be, and I think we’re just bouncing around between 100 point ranges. But if we were to break down and go below the 1.07 level significantly, it probably opens up a move down to 1.0650, followed very quickly by 1.06. If we can turn around and break above the 1.08 level, then 1.09 will more likely than not be targeted as the Euro likes these large round numbers. Whether this is a situation where the market will pay close attention to this number remains to be seen, but it certainly seems to typically be the case, especially if there are a lot of options being traded in that region.

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