EUR/USD Forecast Video for 12.04.23
Euro vs US Dollar Technical Analysis
The Euro initially rallied during the trading session on Tuesday, to reach the 1.09 level. This is an area that begins a significant amount of resistance all the way to the 1.10 level, as we have seen recently. The question at this point is going to be whether or not we are forming some type of double top, and if the US dollar is going to start to strengthen again.
Even if we did break down from here, it doesn’t necessarily mean that the Euro is going to fall apart. After all, you would have to deal with the 1.08 level as potential support, right along with the 50-Day EMA indicator shortly thereafter. After that, then you are talking about the 200-Day EMA which is right around the crucial and psychologically important 1.05 level. In other words, there are a lot of things that can happen on the way down, but at this point, it looks like the Euro is going to struggle to continue going higher. The question now is whether or not this will become an important double top.
A lot of this will more likely than not come down to risk appetite, as we have seen multiple times in this pair. Just above, we have the 1.10 level which is a large, round, psychologically significant figure, and an area where a lot of people would be paying close attention to the Euro in general. If we were to take out that level significantly, then it opens up a much bigger move to the upside, perhaps reaching all the way to the 1.1250 level.
A lot of things have happened over the last couple weeks it could give us a situation where there are so many different outcomes are possible, but at this point I would be very cautious about trying to buy this market, as there is so much in the way of overhead selling pressure. Alternatively, a lot of this will come down to whether or not people are feeling like global growth continues, or if it is going to be a situation where people start running back to the safety of the US dollar.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
