EUR/USD Weekly Price Forecast – Euro Continues to Look at The Ceiling

Euro vs US Dollar Weekly Technical Analysis

The Euro has rallied towards the 1.12 level during the trading week, which of course is a large round psychologically significant figure and an area that I think a lot of people will be paying close attention to. Ultimately, this is a situation where we continue to see a lot of questions asked about the Federal Reserve interest rate cut. Does that mean that the dollar gets eviscerated? Considering that we saw a 50 basis point cut, it’s hung in there fairly well. It’ll be interesting to see how this plays out going forward, because there’s also the theory that when the Fed cuts by 50 basis points and history backs it up, something ugly is about to happen.

If that’s going to be the case, the Euro is not going to be where people hide. I can envision a situation where the Euro spikes for a few weeks and then turns around and crumbles. I think that’s very possible. If you look back to when I started trading in 2006, we saw that the following year the Fed started to panic. I don’t think that the situation is quite that dire, but I do think that we are heading in that direction.

If that’s going to be the case, you need to pay attention to treasuries and the bond market. Watch that spread between German boons and US treasuries. If we do break to the upside, we could go as high as 1.15, where the next cluster of massive resistance is. Just like if we break down the 1.11 level and the 1.10 level, both should offer support.

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