EUR/USD Weekly Price Forecast – Euro Continues to Show Indecision

Euro vs US Dollar Weekly Technical Analysis

The euro has gone back and forth during the course of the week and at this point in time, it looks like we continued to pay close attention to the 1.07 level as a potential resistance barrier. If we can break above there, then I think the market is likely to go higher, perhaps reaching towards the 50 week EMA.

In general, I think at this point in time that is an area that will be difficult to overcome. That being said, if the market were to rally towards that area, I suspect there would be plenty of people willing to short at the first signs of exhaustion. If we break down below the bottom of the candlestick for the week, then it opens up a move down to the 1.05 level.

Keep in mind that the ECB is likely to cut rates. And of course, the previous candlestick was very negative looking. And typically, those long negative candlesticks do have a bit of follow through. Although we may get a short term bounce in the process. And there is a lot of risk off behavior out there. And then of course will favor the US dollar.

Furthermore, the Federal Reserve is likely to stay tight for longer than people expected, so that continues to put downward pressure on this pair in general. If we can break down below the 1.0450 level, then I think the euro could just fall apart. Certainly, it looks at this point in time as we are forming some type of topping pattern or consolidation.

I still lean towards consolidation for the year because both central banks are going to be kind of unable to do anything along the lines of tightening monetary policy. And I do think eventually the Fed does have to cut rates. The question is, will it be this year? At this point in time, I remain fairly neutral, but I do prefer fading rallies.

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