EUR/USD forecast video for 03/16/23
Euro vs US Dollar Technical Analysis
Contagion concerns have suddenly appeared in the European Union after Credit Suisse reported that there would be no more relief from financiers in Saudi Arabia. After all, the bank has been at the center of a lot of problems over the past several years, and sank without any help, sending the CDS market to a 36% chance of default thanks to that bank pricing. Because of this, it is very likely that money is flowing out of the EU as Credit Suisse almost certainly has its fingers across the continent.
euro fell toward the 200-day EMA, and was down 200 pips by the time the New Yorkers got to work. If the market breaks below the 200-day EMA, it could open a new wave of selling pressure, sending the euro down to the 1.03 level, possibly even down to the parity level. In that environment it is likely that we will see considerable US Dollar strength in general, as traders seek safety. This almost certainly means that the market will continue to favor the US Dollar as money is flying towards the US Treasury market.
If we rally at this point, it’s hard to imagine it sticking anytime soon, with the 50-day EMA more likely than not with a bit of resistance in the way. Furthermore, the market was struggling with the 1.07 area, an area that had previously been difficult to move up. If we break above the 1.08 level, it opens up the possibility of a move to the 1.10 level, although this seems highly unlikely at the moment.
We recently saw the Euro rally due to the fact that a lot of traders are counting on a rate cut by the Federal Reserve due to the fact that just a few days ago there was a bank bailout in California. However, if Europeans suddenly feel the need to worry about contagion, it essentially makes things “all in” which will surely be worse all around in that environment.
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This Article Originally posted on FX Empire