EUR/USD Forecast 02/06: Remains Range-Bound (Video&Chart)

(MENAFN- Daily Forex) I think interest rates will continue to weigh upon the EUR/USD pair, as the Americans are offering so much at the moment. With rising rates in Monday trading, its no surprise that this pair fell.

EUR/USD Struggles for Direction Amid Rate-Driven Volatility

The Euro has been noisy during the trading session on Monday as we are bouncing around between the 50-day EMA above and the 200-day EMA below.

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With this being the case, I think you have to look at this as a market that is going to continue to be noisy, it's going to continue to be choppy, and I think it's going to be a scenario where a lot of us are looking for some type of clarity.

If we can break above the 1.17 level, then it's possible that market participants could see this market go looking to the 1.18 level. Underneath, if we were to break down from here, then we could go looking to the 1.1450 level.

Interest Rates and Market Drivers

I do think that we get a lot of noise, and I do think that the interest rates in America will continue to be a major driver of where we are going, as the US dollar will strengthen or weaken depending on whether or not the rates climb. They did climb early on Monday and that has worked against the Euro for a while.

I think this is a situation where a lot of people are going to be looking at this as a market that eventually has to make a bigger decision, but in the short term, I think we still simply go back and forth.

I don't think there is any clarity right now and the bond markets of course are moving based on the latest headlines coming out of the Middle East, so I expect more chop than anything else.

EURUSD Chart by TradingView

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