EUR/USD Forecast – Euro Continues to Test a Trendline

EUR/USD Forecast Video for 29.05.23

Euro vs US Dollar Technical Analysis

The Euro rallied a bit during the trading session on Friday but started seeing selling pressure later in the day. Ultimately, we are looking at a trend line that, of course, is going to be crucial, and the market will pay close attention to this general vicinity. The uptrend line of course is significant and a lot of people will be paying close attention to it. Furthermore, the 200-Day EMA sits just below the trendline, so I think it all ties together for a significant amount of support.

That being said, if the market was to break down below the 200-Day EMA, then we could go down to the 1.05 level. The 1.05 level is an area that is a lot of support just waiting to happen, and of course, is a large, round, psychologically significant figure. Anything below there would open up a huge selling pressure on this market, as it would be like opening the floodgates. Keep in mind that the Federal Reserve is very tight with his monetary policy, and people are starting to price in the idea that perhaps the US dollar will continue to strengthen and that maybe the Federal Reserve will be tighter than people had been hoping.

With this being the case, I think we get a situation where we will continue to see a lot of noise, and as we are sitting right here at a major potential turnaround point, you will have to let the market tell you what is going to do before trying to “front run the move.” Remember that this is a market that can be extraordinarily choppy right around the 200-Day EMA as the euro almost always seems to have some type of lifeline, and people of course try to get away from the dollar so they can take more risk. However, if we do get some type of negativity out there when it comes to overall risk appetite, then this pair will fall.

What I want to see is a larger daily candlestick, giving us an idea as to where we are going long term. If we break below that 200-Day EMA, then I will be short of this market, aiming for that 1.05 level. On the other hand, if we turn around and take out the top of the candlestick for the Friday session, then I anticipate we may get a bounce toward the 50-Day EMA.

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This article was originally posted on FX Empire

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