EUR/USD Forex Forecast: Dances Around the Same Big Figure as Last Week

The EUR/USD has rallied a bit during the trading session on Wednesday, as we await the FOMC Meeting Minutes. This could give us a bit of a “heads up” as to what the Federal Reserve is going to do and what it is thinking, and therefore I think you need to pay close attention to the reaction after the minutes.

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Underneath, the 50-Day EMA continues to race toward the 200-Day EMA, it’s likely that we will see a lot of attention paid to the fact that we are forming the “golden cross.” Looking at this chart, I think that’s an area where we see a lot of noise, and therefore think a lot of buyers would come back into the picture to try to support the Euro. If we break down below there, then it opens a move down to the 1.01 level. The 1.01 level is an area where we have seen a lot of resistance previously, so, therefore, I think there is a bit of “market memory” in that area just waiting to happen.

Enthusiasm for the Euro Begins to Wane

• On the other hand, if we do rally, then it’s likely that the 1.08 level above it is still a major barrier, and if we were to break above there, it’s possible that we could go to the 1.10 level.
• All things being equal, this is a situation where we are dancing around the 1.06 level, which is an area that has been important for several weeks. It is interesting that we sold off so hard on Tuesday and then gained back about half of the losses almost immediately.
• However, as we get later into the session on Wednesday, it seems like some of the enthusiasm for the Euro is starting to wane a bit.

I do believe that by the end of the week, we will probably have a little bit more in the way of clarity, because we will not only have had the FOMC Meeting Minutes, but we would also have the jobs number coming out on Friday, which gives us an idea as to what the Federal Reserve will have to do. Ultimately, we are in a range that will get broken, and once it does it should give us a huge idea as to where we go next.

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