EUR/USD Forecast – Euro Continues to See Support in The Short Term

Euro vs US Dollar Technical Analysis

Take a look at the euro and you can see that we are a little bit noisy and sideways in general as we’re waiting for CPI and later in the week pie. This is a market that continues to see the 1.10 level above as a significant resistance and therefore, we need to pay close attention to it. If we were to break above there, especially on a daily close, I think the euro really starts to tick off towards 1.1150, while underneath we have a pretty significant amount of support right around the 1.08 level and then again at the 50 day EMA. As things stand right now, it appears that traders are more concerned about the Federal Reserve cutting rates later in the year than anything else.

But the reality is that the Europeans are going to be cutting rates, too, because quite frankly, they won’t have a choice. With half the continent heading into recession, it seems it’s only a matter of time before they have to stimulate as well. I do think that we have more or less a rangebound market for most of the year, just due to the fact that both of these central banks are going to be loosening their monetary policies.

The pair is typically quite choppy anyway, so none of this should be a surprise. But ultimately, I think 1.10 is the level that you need to pay the most attention to right now. The bottom of the overall chop is all the way down at 1.07. So it’s possible that we could drop all the way down there and really not change much.

Either way, you need to keep your position size reasonable, and I do think you have a scenario where a lot of traders will continue to look at this through the prism of trying to find a little bit of value if and when they can. So, a short term pullback probably attracts a little bit of buying, but I don’t expect this to be one of the livelier pairs this year.

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