EUR/USD Price Forecast – Euro Drafting Lower

The Euro fell a bit during the trading session on Thursday as we continue to see yields in the United States climb. This was exacerbated slightly during the Asian session due to the fact that there are reports that the Joe Biden stimulus package might be over $2 trillion. That of course will have people demanding more yields for bonds, so in a perverse reaction we would see a short-term push into the US dollar. With that being the case, it will naturally weigh upon the Euro, which is essentially the “anti-US dollar.” All things been equal though, there are plenty of reasons to think that this pair may find buyers underneath.

EUR/USD Video 15.01.21

The first area of major support would be the 50 day EMA which is just below, but beyond that we also have the 1.20 level, which is the top of a 100 PIP range of support that was previously so resistive for the market. All things being equal, I think that buyers will show up at one of these levels, and especially the 1.20 level as it is so obvious. To the upside, the 1.23 level will be an area that people need to pay attention to, as it shows massive resistance extending all the way to the 1.25 handle. If we can break through all of that, then it would be a strong sign for the Euro longer-term, which of course could send this market much higher levels. That is the base case scenario for a lot of pundits out there, but we have a lot of work to do before that kicks off. In the meantime, one would have to assume that we continue to go back and forth.

For a look at all of today’s economic events, check out our economic calendar.