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EUR/USD Forecast – Euro Gives Up Early Gains During Holiday Trading

EUR/USD Forecast Video for 30.05.23

Euro vs US Dollar Technical Analysis

The euro initially tried to rally during the trading session on Monday, but gave back gains rather quickly as the thin Memorial Day holiday trading of course will have had a part to play. What’s interesting to see is that we are sitting right on a major trend line and of course, the 200-Day EMA. By doing so, it looks like the market is going to continue to see a lot of noise in this area but if we were to break down below the 200-Day EMA, then I think the euro could plunge toward the 1.05 level.

On the upside, I see a lot of resistance and it is possible that we could give back gains and start seeing more of a “fade the rally” type of market. The 50-Day EMA is all the way at the 1.0850 level and is dropping rather quickly. By doing so, the market is going to face some headwinds if it does rally at this point and therefore I think you have to look at this through the prism of somewhat limited upside.

ANNUNCIO PUBBLICITARIO

As the Fed Funds Futures rate continues to point toward a strengthening possibility of interest rate hikes coming out of the Federal Reserve this summer, then it’s likely that the US dollar will continue to outperform. Furthermore, Germany has now entered a recession and that of course will do no favors for the euro itself, not to mention what is going to do to the other European economies.

In this environment, it makes quite a bit of sense that the euro will continue to struggle, but I also recognize that we are still technically in an uptrend and therefore you have to treat it as such. Anything that sends this market below the 1.05 level could be rather drastic and we could see another attempt to take out the parity level, but that’s obviously something that would be down the road and not necessarily any time soon as we have a lot of noise between here and there to begin with.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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