EUR/USD Forecast May 24, 2017, Technical Analysis

The EUR/USD pair had a relatively stable session on Tuesday, as the 1.12 level underneath continues to offer support. With recent comments coming out of Angela Merkel suggesting that the common currency is far too cheap, the market has continued to find buyers. We been in an uptrend anyways, as you can see based upon moving average is on the hourly chart. However, the longer-term outlook still has the market consolidating between the 1.05 level on the bottom, and the 1.15 level on the top. In fact, we have been consolidating in this rectangle for 3 years now. Because of this, it makes sense that the market would go fishing for the 1.15 level above, at least in the next move.
Federal Reserve interest rate hikes
We already know that the Federal Reserve is going to raise interest rates a couple of times later this year. However, any suggestion that we are not going to see those interest rate hikes with supercharged the move higher, and could be the reason to break above the 1.15 handle eventually. The short term though, that would just be speculation so I believe that we will continue to be in the situation where we could buy on the dips, aiming for the 1.15 level above longer-term. That’s not to say that it’s going to be easy, but I think it would make a significant target and the certainly make quite a bit of sense when you look at the weekly and monthly charts.
Alternately, if we break down below the 1.1150 level, we could then see this market roll over to the 1.10 level underneath. I don’t think that’s going to happen, but we always should take a look at the alternate scenario, as is prudent in trading.