EUR/USD Forecast 06/11: Euro Under Pressure (Video)

(MENAFN- Daily Forex) The euro continues to see a lot of noisy trading, as we are looking at a market that has to factor in the inflation situation, especially energy-related. However, we also have the Non-Farm Payroll numbers coming tomorrow.

EUR/USD

The euro has been all over the place against the U.S. dollar on Thursday, which makes a certain amount of sense considering traders are starting to talk about the jobs report tomorrow. That, of course, will be a major mover of markets if we get some type of surprise.

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As things stand right now, the United States is expected to have added 65,000 jobs last month. If that ends up being the case, then we may go sideways. If it's hotter than that, I would anticipate that the euro probably suffers at the hands of the U.S. dollar, as the Federal Reserve is expected to raise rates in December anyway. If it's extraordinarily hot, things could get ugly.

The European Union has quite a few issues

On the other hand, if we were to rally from here, the 50-day EMA at the 1.1309 level would be a bit of a barrier. Breaking above there opens up the possibility of 1.1350 being tested. It's really not until we break above that level on some type of daily sustained rally that I would consider becoming bullish.

EURUSD Chart by TradingView

I think in the short term, this is a market that you continue to fade rallies, and the interest rate differential will continue to favor the United States of America. The European Union has quite a few issues, not the least of which is the fact that energy inflation could be a massive problem. The ECB was noncommittal in its last press conference as far as raising rates, while the Federal Reserve is almost all but a done deal at this point

So, given enough time, I do think that the dollar sees continued strength, but it may see the occasional rally in this pair along the way.

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