- The EUR/USD pair is one I always look at, as it can give you a bit of a “heads up” as to how the US dollar is moving.
- As a general rule, if you understand where the US dollar is going, you can often understand what happens with most major forex pairs.
- After all, major forex pairs have the “USD” as part of the equation.
- As the euro is the most widely traded currency against the greenback, it’s a good determinant of what could happen.
Technical Analysis
The technical analysis is fairly neutral at the moment, despite the fact that we have seen quite a bit of pushback near the 1.05 level. The 1.05 level is a large, round, psychologically significant figure, and therefore it will attract a lot of attention overall. With this, I think that we are just simply hanging around in trying to sort out where the market is going to go over the longer term. With this being the case, I think you will more likely than not have a lot of noise, as the Non-Farm Payroll announcement comes out on Friday, which will attract a lot of attention and also cause a certain amount of liquidity issues that will increase volatility.
Top Regulated Brokers
If we were to break above the 1.06 level, then it opens up the possibility of a move to the 1.0750 level. A short-term pullback from here should see plenty of support near the 1.05 level, but if we were to break down below there, then it’s possible that the euro drops to 1.04, which is a small support level, which has been tested a couple of times. Anything below there become somewhat catastrophic for the euro, as traders will more likely than not end up running to the US dollar in multiple currencies, not just this one.
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