July 2, 2022
  • July 2, 2022

EUR / USD forecasts: launches from big numbers

By on May 7, 2021 0

The euro rebounded significantly during Thursday’s trading session as the 1.20 grip offered enough support to keep the market going. In addition, there are a host of technical indicators in this general neighborhood which should also continue to gain attention. The 50 day EMA is sitting just below this zone, and of course we formed a very neutral candlestick in the previous session. The previous downtrend line offered support now that we are past it so I think it is given enough time to continue to offer some bottom. Ultimately, the euro benefits more than anything from the weakness of the US dollar.

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While the candlestick was only around 70 pips, it is bigger than most of the other recent candlesticks we have seen. Having said that, I think it is worth paying close attention to this pair as we have formed a slightly bullish flag. All else being equal, the market has also formed a bit of a ‘falling wedge’ on shorter time frames, so it looks like we are set to go higher.

On the upside, the market could very well go to the 1.22 handle, maybe even the 1.23 handle. The number of jobs will obviously make a big difference to what happens next, so I think you’ll probably see a lot of volatility in the short term, but I think at this point the general attitude of this market is still present. on the upside as traders continue to ditch the dollar on the basis of the massive stimulus amounts the Federal Reserve floods the market with liquidity.

Beyond all that, then you have to look at the idea that the US government is spending billions of dollars in the blink of an eye, so you would have to think that this should have an effect on the greenback as well. However, it’s a market that I think will continue to struggle to make huge moves, just because it’s very volatile to say the least. On the downside, if we were to fall below the 50-day EMA, there is a possibility that we could drop to the 200-day EMA below.

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