EUR/USD Forecast – Euro Continues to See Choppy Noise

Euro vs US Dollar Technical Analysis

The Euro has somewhat been fairly noisy during the early hours on Monday as we continue to look at the 1.09 level. The 1.09 level of course is a large round psychologically significant figure, and therefore a lot of people will be paying close attention to it. With that being said, I think you also have to keep in mind, this is a market that has been simply going back and forth from one round figure to the next. So, the action really isn’t that surprising. We got through the ECB and we now have to determine whether or not the Federal Reserve is likely to cut rates.

At this point, it doesn’t necessarily seem like a slam dunk, if you will. There might be a rate cut between now and the end of the year, but a 25 basis point rate cut basically just gets us to where we were about a month ago. So, with that being said, I think you continue to see a lot of choppy sideways action in a market that, quite frankly, is probably better thought of as an indicator of the US dollar strength or weakness.

The strength or weakness in the United States dollar is quite often profoundly seen here and then can be translated into other markets, for example maybe against the Canadian dollar or the British pound. So, with all of that being said if we break down below the 1.0850 level then we are more likely than not go down to the 1.08 level. If we can break above the 1.0920 level, then it’s possible we go to the 1.10 level. All things being equal, I’m fairly neutral and ambivalent about this pair.

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