EUR/USD Forecast - The Euro Is Still Struggling
The Euro has been on a massive uptrend for some time, but the last week or so has seen the same pattern of battling above the 1.08 level.
Euro vs US Dollar Technical Analysis
The Euro surged again in the early hours of Friday but lost ground rapidly after we surpassed the 1.08 level. This is an area that has consistently caused issues for the Euro, so I don't believe it's a major surprise. This is a back-and-forth situation in which we can't seem to find our foothold. I believe that given enough time, we will have to make a larger choice, but it is clear that we are not yet ready to do so. With that in mind, I see this through the lens of a range-bound market that doesn't know what to do with itself.
According to the Davos speakers, higher for longer and more tightening is coming from both central banks, so it is no longer a one-way transaction. That being said, if you need to justify a move in this market, you might consider the probability of a worldwide downturn. Keep in mind that when the global economy slows, the US dollar tends to benefit as people seek protection. I'm not sure whether that's exactly what's going to happen here, but it certainly appears like a short-term retreat is in the works. That being said, a break over the 1.09 level sets up a clear shot to the 1.10 level.
On the downside, I believe the 1.06 level will be supported if we go that far on a retreat. In other words, more chop is almost certainly on the way.