EUR/USD Weekly Forecast – Euro Takes Off for the Week

EUR/USD Forecast Video for 17.07.23

Euro vs US Dollar Weekly Technical Analysis

The euro has rallied rather significantly during the trading week, breaking above the 200-Week EMA and of course the 1.12 level. The euro was buoyed by the lower than anticipated inflation numbers coming out of the United States, which put a pummeling on the US dollar. At this point, it looks like short-term pullbacks will probably continue to attract a lot of attention and of value hunters, perhaps sending the euro to the 1.15 level.

Underneath, somewhere near the 1.11 level, I would anticipate seeing some type of support, extending down to the 1.10 level, which of course is a large, round, psychologically significant figure. In general, the euro looks as if it is ready to go looking for the 1.15 level, but I don’t necessarily think that it will be easy or quick, but I do think that the trajectory is definitely to the upside.

It’s not until we break down below the 1.10 level that I would take any pullbacks seriously, and I would not be a seller until we break down below the 1.09 level. The 1.09 level is an area that has been important from a structural standpoint a couple of times now, so if we were to break through that it would send more “FOMO trading” in the direction of the US dollar. Having said that, with the trajectory of the market being so strong to the upside, it would take something rather significant to send this market back down like that.

As things stand right now, most traders recognize that the Federal Reserve is probably going to raise interest rates a couple of times, but that has already been priced into the market. Traders are now starting to suggest that the Fed will have to become a little bit more aggressive in cutting its rates by the end of the year, which Federal Reserve staunchly pushes back against. Whether or not that ends up being the case remains to be seen, but it certainly looks as if the market believes that they will have to take a more dovish stance quicker than they are letting on. In other words, you can expect a lot of volatility going forward.

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