- Summary:
- In this EUR/USD forecast, we look at the recent price action and why the price will likely drop to 1.2050 in the immediate near term.
The EUR/USD is tilting lower ahead of the important Fed interest rate decision. The EURUSD is trading at 1.2130, which is 1.80% below the year-to-date high of 1.2357.
EUR/USD news: The EUR/USD is falling partly because of the weak German sentiment numbers released yesterday by the ifo Institute. The overall present and future outlook among managers is weak because of the rising Covid cases and the lockdowns imposed by the government.
The EUR/USD is also falling as traders wait for the official interest rate decision by the Federal Reserve. Like the ECB did last week, the bank is expected to leave its interest rates and quantitative easing policies unchanged because the economy is not out of the woods yet. Traders will look at the dot plot and the statement by Jerome Powell.
EUR/USD forecast
In my analysis yesterday, I pointed that the euro was forming a head and shoulders pattern. Also, we noted that the pair was forming a rising channel pattern. Today, the pair has just moved below this channel, which is a vindication for the bearish cases.
Therefore, in my view, I suspect that the pair will continue falling as bears target the next support level at 1.2050. This prediction will be invalidated if the price manages to move above 1.2200.
EUR/USD chart
