EUR/USD Forecast – Euro Continues to Test Support

EUR/USD Forecast Video for 06.12.23

Euro vs US Dollar Technical Analysis

The euro has been slightly negative during the trading session on Tuesday but continues to see a lot of noise right around the 1.08 level. The 1.08 level has been important multiple times in the past, but it does look like we are chipping away at the support. As I record the video, there has been an attempt to break down below the bottom of the massive candlestick during the trading session on Monday. All things being equal, we also have to pay close attention to the 50-Day EMA underneath that could offer support as well.

If we turn around and break above the 1.0850 level, then it opens up the possibility of an attempt to break above the 1.09 level. The 1.09 level is an area that had offered short-term resistance, but I think if we can break above there then the market will go looking to the 1.10 level eventually. That is an area that’s been significant resistance more than once, and of course I think will garner a lot of attention.

Most of this comes down to the idea of whether or not the Federal Reserve is going to loosen its monetary policy. Furthermore, you also have to pay attention to the EU economy, which looks weak to say the least, so there is probably only a matter of time before the ECB also finds itself on the back foot. One thing is for sure, the reality is that the market is trying to deal with a lot of different things at the same time, and therefore I think you continue to see a lot of noisy behavior.

Another thing to keep in mind is that the Non-Farm Payroll announcement comes out later this week, although there may be some noise during the session based on PMI numbers as well. Nonetheless, the market is trying to sort out its next move, so that being said, I think you got a situation where you have to be very cautious with your position sizing, and you would probably have to expect quite a bit of volatility. Ultimately, this is a situation where short-term traders will continue to kick the euro around.

For a look at all of today’s economic events, check out our economic calendar.