The Euro exchange rate was a major beneficiary of dollar weakness last year, however, more recently it’s been harder going for the single currency.
The Euro has put on +1.36% vs the greenback over the last three months, but those gains have been ebbing away, over both monthly and weekly timeframes.
EURUSD Analysis and Forecast
From a technical standpoint, the EURUSD rate looks to be supported in the short term by the 50 Day MA at 120.90 and the one month low, just above, at 1.209270. On the upside, there is resistance at the one month and 13-week high of 1.22659.
The path of least resistance in EURUSD is likely to be found on the downside, however, with support levels from early May at 1.2054 and 1.1986 likely to be tested if the 50 Day MA gives way.
Over the medium and longer term, much will depend on the pace of any QE tapering and rate rise expectations. The US is likely to have a first-mover advantage here and we would expect the dollar to strengthen as a result. The 50 week MA at 1.19418 and the February 1st low of 1.195240 are deeper downside levels to watch, with the 29th of March low point of 1.17035 the next notable support thereafter.