EUR/USD Price Forecast – Euro flexes its muscles on Tuesday

The EUR/USD pair has rallied significantly during the day on Tuesday, reaching towards 1.16 level. That’s a very bullish sign, and as I record this it looks likely that we are going to try to break above there. Regardless, this shows that perhaps we have put a bit of a bottom into the market, even if only temporarily. · FX Empire

Christopher Lewis

Updated Tue, Aug 7, 2018, 9:58 PM

The EUR/USD pair rallied a bit during the trading session on Tuesday, bouncing from the 1.1525 handle, and reaching towards 1.16 level by the time I sat down at my desk. The market looks as if it is trying to rally from here, and quite frankly that makes sense considering that the market has been consolidating between the 1.15 level at the bottom, and the 1.1850 level at the top. Overall, the market should continue to go back and forth and stay in this range for the rest of the summer, but as we had gotten a bit too far to the downside, it makes sense that we turned around to rally.

At this point, I anticipate that short-term dips will be buying opportunities, as it offers a bit of value in a currency that is essentially “cheap” at the moment. Market participants will of course take notice if we drop below the 1.15 handle, which could send the Euro down to the 1.13 level next. Otherwise, I think it’s only a matter of time before we reach towards the 1.1850 level, and I think that this type of action makes sense during the month of August, as it tends to be a reasonably quiet month. With this, a gentle drift higher would make sense, as the lack of order flow could give the buyers a bit of a reprieve.