EUR/USD Forecast – Euro Continues to Recover Against Greenback

EUR/USD Forecast Video for 16-02-2024

Euro vs US Dollar Technical Analysis

The Euro rallied a bit during the trading session on Thursday again, as we are trying to recover from that devastating candlestick on Tuesday after the CPI numbers came out much hotter than anticipated. If the market can go to the 1.0750 level, then it could perhaps even reach the 200-day EMA.

The 200 day EMA above is an indicator that a lot of people would be paying close attention to. Anything above there then would open up the possibility of a much more substantial correction. That being said, this will continue to be a market that is going to perhaps have to pay close attention to two central banks that are going to both be loosening their monetary policy sometime this year. Either way, I think in the short term, you’re probably more likely than not to see some type of consolidation right around that crucial 1.0750 level, an area that is a bit of a magnet for price.

On the other hand, though, if we were to break down substantially below the 1.07 level, then it frees the Euro to drop all the way down to the 1.05 level. All things being equal, you should keep in mind that the US dollar is considered to be a safety currency, so that could come into play as well, as there are so many geopolitical concerns. But at the same time, if the Fed is really going to be cutting rates later this year, some traders will be betting against the greenback.

I expect choppy behavior nonetheless, and I do think eventually this year will be very range-bound as both central banks will have pretty much the same overall tone. In this environment, both are going to end up being loose by the end of the year, and markets are trying to get in front of that reality. That being said, as a general rule I do think that the US dollar is favored in times of concern, and it certainly looks like the global economy could be slowing down. With Germany being in a recession, it is only a matter of time before the ECB starts talking about rate cuts.

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