EUR/USD Forecast: Continues to Sit in the Same Range

We are significantly sold off over the last couple of months so I think we’re in a situation where we will continue to go back and forth, but with more of a downward tilt than anything else.

  • The EUR/USD has done very little during the trading session on Wednesday, which might be a minor victory considering just how aggressive the US dollar was on Tuesday.
  • Nonetheless, this is a market that does not look like it is going to hang on to gain very easily, and it is probably worth noting that the 50-Day EMA offered significant resistance this past couple of days, and it has offered something akin to a downward trend line, so that’s something that you need to pay close attention to.
  • I do believe that it is probably only a matter of time before sellers come in and take advantage of any value when it comes to the US dollar.

The parity level has caught a lot of attention, but I do think that it is a scenario where you are looking for rallies that you can fade. Simply jumping in right away and shorting might not be the best move, but I think that the most important thing you can do is simply wait for a better price. The 50-Day EMA sits just below the 1.02 level, and I think that’s an area that a lot of people will pay attention to. After all, the 1.02 level offered a certain amount of resistance recently and breaking above that would not only be a technical victory, but probably a psychological one as well.

Things Could Get Chaotic

The Euro has a whole list of issues that will have to deal with, not the least of which is the fact that the European economy is going to have to deal with a lack of energy this winter. The market has clearly favored the downside for a while, and I don’t think these changes anytime soon. We are significantly sold off over the last couple of months so I think we’re in a situation where we will continue to go back and forth, but with more of a downward tilt than anything else. I have no scenario in which I’m willing to get long of this pair, at least not until the Federal Reserve changes its tune, something that it is not going to be doing anytime soon. Furthermore, the statement after the interest rate hike next week will be parsed quite closely, so that could throw some chaos into the market as well.

EUR/USD

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Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.