EUR/USD Forecast Today 31/12: Weakens Amid Dominance (Video)

(MENAFN- Daily Forex)

• We initially tried to rally a bit and recover, but I think it's obvious that the only currency that you want to own as far as the majors will be the US dollar.
• Interest rates continue to favor the US dollar as they are going higher, despite the fact that the Federal Reserve has been cutting.
• This isn't normal, and therefore it is something that must be paid close attention to.

Furthermore, you also have to keep in mind that the ECB is going to have to cut rates, and the European Union economy is just poor. EUR/USD is a market that I think continues to consolidate between the 1.03 level and the 1.06 level. Any rally that leads towards the 1.06 level I would look at with suspicion, I would not hesitate to start shorting it at the first signs of exhaustion. It looks like that's what traders did during the session on Monday.

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Now, having said all of that, we do have to worry about liquidity, and that might have made the move in both directions a little overdone as far as the reality of it is concerned. But it is still a market that I do not want to get long in. I want to short this market, and we need to break above the 1.06 level to even have the conversation of going long the euro. I don't want to play the bounce because there's no reason for this thing to stay up here from a fundamental standpoint at the moment. You can't just buy something because it's fallen too far. That's a great way to lose money. If we clear 1.03 to the downside, we're going to parity. And that is what I expect to see sometime in 2025.

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