EUR/USD Forecast – Euro Continues to See Noisy Trading After Fed

Euro vs US Dollar Technical Analysis

The Euro initially rallied a bit during the early hours on Thursday, only to give up some of its gains. By doing so, the market looks as if it is going to continue to be very noisy. But ultimately, I also would be paying close attention to the 1.12 level. This is an area that has a lot of interest surrounding it as it is a large round psychologically significant figure. And it’s an area that we’ve seen some pushback multiple times in the past. A pullback from here opens up the possibility of a drop down to the 1.11 level. And then beyond that, we could even look at 1.10.

Keep in mind the Federal Reserve cut interest rates 50 basis points in the Wednesday session and the euro rallying a bit is not a huge surprise, but I do think there’s a bigger story at play here. There will be questions as to why the Federal Reserve cut as aggressively as it did, because quite frankly that is a bit of a panic move and eventually traders may have to question that.

If that ends up being the case in a bit of irony, the US dollar will actually strengthen. So, we’ll have to wait and see whether or not we can recapture the 1.12 level on a daily close because that, I think, would be the trigger to get long of this market. If not, we probably continue to see a lot of back and forth action.

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