EUR/USD Forecast Video for 05.04.23
Euro vs US Dollar Technical Analysis
The Euro has initially shot higher during the course of the trading session on Tuesday, breaking above the 1.09 level. That being said, the market is in an extreme high, so it’ll be interesting to see if we can hang onto these gains. The US dollar of course is suffering at the hands of traders expectations of the interest-rate markets, and whether or not they are going to continue to see interest rates possibly fall going forward in America. If that’s going to be the case, then obviously it works against the US dollar. However, the Federal Reserve has reiterated that inflation is nowhere near where they wanted to be, so I do think that the market will probably end up being somewhat disappointed.
Nonetheless, it doesn’t really matter what the fundamentals are if the price doesn’t agree. Because of this, I’ll be watching very closely the area between the 1.09 level and the 1.10 level. This area has been very difficult to overcome in the past, so one would have to assume there is a certain amount of selling pressure here. If we were to break down below the bottom of the Monday candlestick, that would obviously be very negative, and could send this market reeling. Speaking of which, it is a bit interesting to see just how deep we plunged during the day on Monday at one point.
I would expect a lot of choppy and noisy behavior over the next several sessions as we try to sort everything out. Keep in mind that Friday is Good Friday, and of course we have to think about the idea of the market trying to sort out the idea of a holiday and the Non-Farm Payroll announcement comes out at the same time. Ultimately, this could set up a rather strange week. Furthermore, as most markets will be closed on Friday, it might just be a matter of being in a bit of a holding pattern between now and then. The Euro has its own issues, but at this point it looks like the ECB is going to continue to see a reason to be hawkish as well, so at the end of the day, it could just be a bit of a wash.
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This article was originally posted on FX Empire