EUR/USD Forecast Video for 26.05.23
Euro vs US Dollar Technical Analysis
The euro has fallen again during the trading session on Thursday, as it looks like we’re going to head down to the 200-Day EMA. The 200-Day EMA of course is a longer-term indicator that a lot of people use to determine the overall trend. Ultimately, the market will probably find a little bit of support in that area, but if we were to break down below the 200-Day EMA, then it opens up the possibility of a move down to the 1.05 level.
One thing is for sure, this correction in the euro has been a bit deeper than I think a lot of the bulls are comfortable with. Now we ask ourselves whether or not this is going to be a bigger turnaround, or if the market is going to bounce from here and try to go toward the 50-Day EMA above. The 1.09 level of course would be an area that could be resistance, especially as the 50-Day EMA is right around the same area. Breaking that opens up the possibility of a move to the 1.11 level, which is where the market had pulled back from.
All things being equal, this is a pretty deep correction and we have not necessarily broken down to a bearish trend yet, but we certainly are getting relatively close to doing so. I suspect that the next few days will probably be crucial in determining whether or not the euro can continue to go higher over the longer term. If we were to somehow break down below the 1.05 level, that would be lights out for the euro, meaning that it would almost certainly fall apart at that point.
There are a lot of concerns out there about the global economy, and that money flowing toward the US dollar for safety. While the euro is not necessarily a “risky currency”, it is not as much of a safety currency as the greenback is. With that being said, I think the next couple of days will be crucial and we should see some type of bigger move start to formulate.
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This article was originally posted on FX Empire