The euro rebounds from 1.1550 support on Wednesday but remains in consolidation. Analysts favor selling short-term rallies near 1.17 resistance, citing continued bearish momentum, interest rate advantages for the U.S. dollar, and potential downside toward 1.14 support.
- The euro initially pulled back during the trading session on Wednesday again to test that support level near the 1.1550 level, only to bounce.
- That being said, I think we're still pretty much in a consolidation area. And I don't think that much will change here.
- This is just simply a market that is trying to find its next momentum, causing an incident.
Top Forex Brokers
If we can break down below the 1.1550 level, then it opens up a move down to the 1.14 level, which is an area that previously had been support. The 200-day EMA comes into that area. And I think that is what is going to be quite interesting to watch from a trend following standpoint.
Any Rally Looks Suspicious to Me
The rally, if it comes from here, probably is going to run into serious trouble at the 50-day EMA, which is right around the 1.17 level. Ultimately, this is a market that I am looking for short-term rallies that I can sell into, as we have continued to see quite a bit of negativity. Ultimately, this is a market that I think the previous trend line will continue to be a bit of a barrier that is difficult to overcome.
I just look at this bounce as another opportunity to pick up cheap US dollars and take advantage of any signs of exhaustion. I don't have any interest in buying euros right now. I think ultimately, we do drift lower, but that doesn't mean it's easy. It will be noisy, it will be choppy, but that's normal for this pair.
So, keep that in mind. The interest rate differential still favors the US dollar. That helps as well. All things being equal, I think we remain slightly bearish on the Euro overall, and the US dollar should continue to attract inflows.
Ready to trade our EUR/USD daily forecast? Here’s a list of some of the top forex brokers in Europe to check out.