EUR/USD forecast looks positive

The EUR/USD dipped throughout Friday’s trading session. However, it eventually recovered and showed signs of resilience. Meanwhile, investors were eager to take a little risk ahead of the weekend. The US dollar rose against a number of currencies. However, selling the Japanese yen became the largest mover of the day. The euro seems to continue to suffer a lot of volatility. Even though the market has peaked, experts predict a downturn. Albeit, it may not be severe.

The 50-Day EMA is approaching 1.08 as EUR/USD climbs up. That way, dynamic support shows up on the horizon. Therefore, it becomes a strong target for a pullback. The market has a propensity to find buyers on falls. Owing to expectations that the European Central Bank would remain hawkish, the Federal Reserve will ultimately slow down. This assumption remains under testing. However, in the short term, we will likely witness a “buy on the dip” mentality.

Despite the market noise, there is a strong trend, so there will be volatility ahead. Risk on/risk off is the position, and if the market breaks higher. Therefore, it may become more of a “buy-and-hold” situation. In such a crowded market, it is critical to avoid becoming unduly aggressive.

The market might decline

On the upside, significant resistance may appear at the 1.1250 level. Followed by 1.15, both are psychologically and structurally significant levels. There will be more volatility in the future as traders react to the current developments.

Meanwhile, the euro rose throughout Friday’s trading session. On the other hand, the US dollar fell versus several currencies. The market is headed toward stabilizing, with the 50-Day EMA offering dynamic support near 1.08.

The short-term outlook is one of “buy on the dip,” owing to the anticipation that the European Central Bank would maintain its aggressive stance. Despite the noise, there is an ongoing trend. Furthermore, traders are practicing caution when trading in such a volatile market. Resistance is likely between 1.1250 and 1.15. Moving forward, the Federal Reserve meeting on Wednesday might be significant. And it should be noted that May Day is coming Monday.