EUR/USD Forecast Video for 17.05.23
Euro vs US Dollar Technical Analysis
The euro initially tried to rally during the session on Tuesday but gave back gains as we continue to see a lot of noisy behavior around the 50-Day EMA. The 1.09 level has been important previously, so it should not be a huge surprise to see it act as a bit of a barrier, especially considering that the 50-Day EMA sits right there as well. Ultimately, this is a market that I think given enough time will have to make a bigger decision, but it’s obvious that we are in an area that is going to be hotly contested. This makes sense, considering that there is so much in the way of confusion economically, and of course traders around the world continue to build their own narrative as to what the central banks are going to do.
Underneath, the 1.08 level does offer a certain amount of support, and if we were to break down below there it’s likely that the market could drop down to the 200-Day EMA, which sits near the 1.07 level. The 200-Day EMA attracts a lot of attention as a trend defining indicator, so it does make a certain amount of sense that we would expect to see volatility if we do drop to that area. We have seen a lot of negativity in the euro recently, but at the end of the day, the US dollar has been oversold for a while so this should not be a huge surprise.
Ultimately, choppy volatility will probably continue to be the way forward, especially as we head into the summer time, and volumes may drop a bit. Either way, it does look like we probably have more downward pressure than up in the short time, so therefore I lean toward fading rallies, but I would not get too heavy in a position, regardless of the direction you choose. With this, short-term charges will probably be favored, with a shorter-term bias of “fade the rally” as the markets continue to see a lot of uncertainty, perhaps driving more money back into the US dollar. Keep in mind, you cannot get married to anyone position in this environment.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire