USD/EUR Forecast: Euro Drops Into The Weekend

Conversely, if the Euro rallies from its current position, it could trigger a short-term bounce.

  • The EUR/USD currency pair experienced a notable decline during Friday's trading session, plummeting to the 1.07 level.
  • This considerable drop completely negated the post-FOMC surge, sparking concerns about risk appetite among traders.
  • With the global economy facing potential threats from credit issues, it seems that these economic burdens will continue to weigh heavily on market performance.

 

Euro's Outlook Is Predominantly Negative

Interestingly, the 50-Day Exponential Moving Average (EMA) is positioned just below the 1.07 level and appears to be on an upward trajectory. While this technical indicator will certainly garner attention, it's also important to recognize that the market failed to reach the 1.09 level, which is where it had previously collapsed. Consequently, it appears that the Euro's outlook is predominantly negative for the foreseeable future, with the US dollar likely gaining strength in this uncertain economic landscape.

The 1.06 level is another key area to watch, as it will be closely monitored by numerous market participants. Additionally, the 200-Day EMA situated below this level could offer significant support. A market breakdown below the 200-Day EMA would be an exceptionally negative development, warranting vigilant observation of such movements. In this case, the market would likely experience a resurgence of overall negativity.

Conversely, if the Euro rallies from its current position, it could trigger a short-term bounce. However, for the Euro to confidently enter a bullish phase, it would need to break above the 1.10 level. This shift would most likely coincide with widespread US dollar weakness, so it is crucial to keep an eye on other currency pairs globally. If the US dollar experiences a decline across the board, it could provide an even greater boost for buyers in the Euro market. In general, the market is expected to remain quite noisy around the current levels as it grapples with making a more significant decision.

At the end of the day, the Euro is going to have to deal with US dollar strength and weakness more than anything else, because we have already seen that the European Central Bank is trying to fight inflation, but if there are a lot of concerns around the world when it comes to global growth, the US dollar is going to be the place where everybody runs. I anticipate that the next several session should be choppy, as we try to decide whether or not we have peaked, or if we can blow through that resistance above.

(Click on image to enlarge)

EUR/USD chart


More By This Author:

S&P 500 Forecast: Lackluster Friday Session
Pairs In Focus This Week - Sunday, March 26
USD/JPY Forecast: Continues To Find Buyers On Dips

Disclosure: DailyForex will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.