EUR/USD Forecast – Euro Gives Up Early Gains
EUR/USD Forecast Video for 20.03.23
Euro vs US Dollar Technical Analysis
The Euro initially shot higher during the trading session on Friday but gave back gains rather quickly as it broke above the 50-Day EMA. By doing so, it looks as if the market is trying to settle into some type of trading range at the moment, which does make a certain amount of sense as there are so many risks out there that traders currently have to deal with.
With the market being between the 50-Day EMA above and the 200-Day EMA below, it would make a certain amount of sense that we consolidate, as those 2 moving averages tend to attract a lot of attention. With that being the case, it looks as if the 1.06 level is going to be some type of epicenter of trading, and therefore we may be seeing a bit of “reversion to the mean” type of set ups at the moment.
If we were to break above the top of the Friday candlestick, the 1.0750 area is like a significant brick wall that’s going to be difficult to get above. I think at this point you have to be very cautious with any significant position sizing, because we are most certainly squeezing to make a bigger move. Furthermore, if we were to break down below the bottom of the massive candlestick on Wednesday, that could open up a flood of selling, as it would reiterate the fear in the marketplace the people might be feeling. At this point, I certainly believe that the sellers have a stronger argument, but what you believe in what the market does quite often will be 2 different things, so caution is the better part of valor.
On a move to the downside, the market could go to the 1.03 level, and then possibly parity. If moved to the upside, even if we were to break above the 1.0750 level, there’s a lot of noise above that could cause issues, as we have seen the market selloff quite drastically from the 1.10 level, leading me to believe that there is more out there to get traders nervous about. With that in mind, the US dollar will probably continue to attract a certain amount of attention.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
