EUR/USD Forecast – Euro Continues to Power Higher

EUR/USD Forecast Video for 28-12-2023

Euro vs US Dollar Technical Analysis

The euro initially pulled back just a bit during the course of the trading session on Wednesday, but then turned around to show signs of life to really start to racket to the upside. At this point, I think euro traders continue to jump in every time we pull back, and therefore I think this is a market that will continue to reach toward the next major resistance barrier in the form of the 1.1250 level. This is an area that has had significant resistance previously, therefore I think it does make a nice target.

All things being equal, this is a situation where we continue to see a lot of volatility, but ultimately the US dollar continues to see a lot of volatility due to the fact that the interest rate market serves so all over the place at the moment. Ultimately, I do like buying dips to get little bits and pieces of value, as the euro is clearly the favorite currency at the moment. Beyond that, we have also broken out of a major resistance level, and therefore I think it’s a situation where anytime you get a little bit of value you must jump on it.

That being said, we also have to keep in mind that the market participants will have to pay attention to liquidity issues as a lot of the big players won’t be involved in the markets at the moment. This could be an issue for the next week or so, and as a result we may get erratic moves, or we may not get hardly any movement at all. It’s almost impossible to predict that, as it comes down to whether or not a large order comes in and disrupts the marketplace.

As things stand right now, it appears that the European Central Bank is going to keep its interest rates and monetary policy rather tight, while the Federal Reserve is already starting to talk about cutting rates in 2024. They have walked that back just a little bit, but ultimately this is something that the market is already starting to price in. That being said, if we get some type of major “risk off event”, then it’s possible that the US dollar picks up strength again.

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