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EUR/USD Price Forecast – Euro Pulls Back Heading Into the Weekend

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·2 min read
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Euro vs US Dollar Technical Analysis

The Euro has pulled back a bit during the trading session on Friday, as we are trying to take out the 1.05 level to the downside. We’ve been in a downtrend for ages now, so despite the fact that we recently formed a little bit of a double bottom, it should not be a surprise to see negativity here. If we break through that double bottom, then it’s likely that the market goes looking to reach the 1.02 level, possibly even the parity level.

When you look at this chart, you can see that the 50 Day EMA has offered dynamic resistance multiple times, and it is now flowing lower again. With that in mind, I think any rally that we get has to be looked at with suspicion, and therefore I will be looking for signs of exhaustion in short-term rallies. Beyond that, the ECB has started to blink on that as they have had an emergency meeting to do something about Italian bond yields. In other words, the ECB may not be able to tighten very long, and therefore the Federal Reserve tightening cycle for at least the next couple of meetings.

In other words, the US dollar will continue to strengthen for the time being, but if the Federal Reserve were to step away from the tightening cycle, that could obviously change everything. I don’t see that happening, but it’s something to keep in the back of your mind.

It is only a matter of time before the ECB has to do something more dovish, and therefore traders are trying to get ahead of it by selling the Euro every time it tries to rally.

EUR/USD Price Forecast Video 20.06.22

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This article was originally posted on FX Empire

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