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

Euro vs US Dollar Weekly Technical Analysis

The Euro initially rallied a bit during the course of the week, but as we got through the ECB meeting, it was apparent that the Europeans may still be cutting rates later down the road, perhaps even in September. So, with that, the Euro gave up some of the gains and now it just looks like a market that is staying in the same compressed area that it’s been in for a while. With that, I think you’ve got a situation where traders will continue to see a lot of noisy behavior, a lot of going back and forth from one large round psychologically significant figure to the next.

So, for example, you can see on the weekly chart that we had bounced from 1.07, stopped a bit at the 1.08 level, and then challenged the 1.09 level. In general, this is a market that has been very noisy and sideways, but if you look at it through the prism of the blast, basically two years, we’ve been in a 500 pip range.

I don’t think that will change anytime soon because quite frankly, traders are betting on the Federal Reserve cutting rates as well. So, all things being equal in a relative valuation, not much is probably going to change. I do use this as an idea as to where the US dollar is going and therefore it is a useful market to pay attention to even if you’re not trading it.

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