EUR/USD Price Forecast – Euro Pulls Back And Recognizes Gravity Again
The Euro has fallen a bit during the trading session on Wednesday, reaching down towards the 200 day EMA midday. Ultimately, this is a market that is parabolic and therefore does need to come down a bit. This doesn’t necessarily mean that the Euro is going to collapse, rather that the market can’t go in the same direction forever. With that in mind it makes sense that traders will continue to look at this is a market that probably needs to relax a bit and therefore I would anticipate that we should continue to see a bit of selling pressure.
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Another thing that is worth paying attention to is the fact that the European Central Bank is likely to do some type of quantitative easing, and that could weigh upon the Euro itself. While the market had been pricing in a 50 basis point cut leading up to the actual surprise announcement, the Euro hasn’t really priced in much from the ECB as it will have to take somewhat unconventional measures.
EUR/USD Video 05.03.20
At this point, it is very likely to see a lot of noise and perhaps even profit-taking. That being said, if we did break above the 1.1250 level, that would be extraordinarily bullish for the Euro, and could kick off a longer-term uptrend. At this point though, it’s very difficult to imagine a scenario where the Euro suddenly becomes favored over the US dollar due to the fragile nature of the European Union itself. At this point I still favor the downside in the short term, perhaps with a special caveat being the 1.10 level offering support.