EUR/USD Forecast: Euro Continues to Rally but Fails to Hold Gains

• The euro has rallied against the US dollar But it's continuing to struggle with hanging on the gains at this point it's very interesting to see how things have played out because the Federal Reserve cut interest rates and That was the top of the euro against the US dollar at least so far with that being the case it does look like we are trying to change the structure of this market, but I also recognize that we've got a lot of noise ahead of us in the form of the non-farm payroll announcement on Friday.
• So, it'll be interesting to see how this plays out. The JOLTS Jobs Openings number came out during the Wednesday session, which was rather poor.
• And while that originally sent the U S dollar lower, the reality is that if the United States starts to slow down, it will have a negative influence on Europe and other places like that. Let us not forget that the Federal Reserve cutting rates is a known thing.
• There's nothing surprising about it. And even if they do cut rates, you have to wonder if the economic slowdown is starting to become a bigger problem. If it is, then you've got a real situation where the U.S. dollar ends up being eventually preferred over most other currencies as U.S. Treasuries will continue to attract inflows.

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There's a little bit of a balance there that you have to find because buying treasuries demands US dollars, but eventually the yields get so low that people stop. We aren't anywhere near that right now. So, we may see a bit of a recover for the US dollar if we break down below the 50 day EMA and then the uptrend line on the way down to the 1.16 level, anything below the 1.16 level for me suggests that we're in the midst of a trend change. We are structurally starting to see the first signs of this. On the other hand, if we turn around and rally from here and clear the 1.18 level, then I think the euro continues to grind towards the 1.20 level.

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