EURUSD Technical Analysis / Forex Technical Analysis

EURUSD Market Analysis – Understanding the Downtrend

FxNews—We’ve observed some interesting trends. Here’s our latest EURUSD Market Analysis. The EURUSD currency pair, a key indicator in forex trading, has recently closed below the pivot in the 4-hour chart. This is a significant development as it is currently testing the broken channel.

EURUSD Market Analysis – Understanding the Downtrend

For those new to forex trading, the pivot point is a technical analysis indicator used to determine the market’s overall trend over different time frames. The pivot point is the average high, low, and closing prices from the previous trading day. On the subsequent day, trading above the pivot point indicates ongoing bullish sentiment, while trading below the pivot point indicates bearish sentiment.

The Relative Strength Index (RSI), another crucial tool in market analysis, is currently hovering below the 50 level for the EURUSD pair. The RSI is a momentum oscillator that measures the speed and change of price movements. Traditionally, readings over 70 are considered overbought, and readings under 30 are considered oversold. However, a reading above 50 in trending markets can indicate that the uptrend is in good health and likely to continue.

Given these factors, the downtrend will likely continue, targeting 1.049 and 1.039. These figures represent significant levels of support that could potentially halt or reverse the downtrend.

On the flip side, 1.05851 plays as resistance. This means an uptrend could be expected to pause at this price level due to a concentration of supply (or sellers). If the currency pair breaks this level, it would invalidate our bearish scenario.

In conclusion, our EURUSD Market Analysis suggests a potential downtrend continuation. However, as with all forms of trading analysis, it is essential to use other indicators and methods to confirm these findings and always trade responsibly.

EURUSD Market Analysis: Fundamentals

Reuters – The Euro, the single currency most European countries use, strives to maintain its value at 1.05. This comes after a recent surge in pressure following the announcement of Consumer Inflation in the United States.

Inflationary pressures refer to the rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is falling. Central banks attempt to limit inflation and avoid deflation to keep the economy running smoothly. Although these pressures have significantly decreased, they remain at levels that are causing concern for the US Federal Reserve. The announcement of a slightly higher-than-expected consumer inflation increased US Treasury yields, strengthening the US currency.

The market’s behavior yesterday essentially confirmed our predictions as we expressed considerable skepticism about whether the recent reaction of the European currency could have a more extensive and lasting impact. Today’s Agenda includes industrial production in the eurozone, President Lagarde’s speech, and the announcement of Consumer sentiment in the United States. Industrial production is a measure of the output of the industrial sector of the economy. It includes mining, manufacturing, energy, and construction.

The general climate continues to favor the US currency due to several factors. The US economy is growing faster than Europe, US government debt securities offer high yields, and there’s an atmosphere of uncertainty, which traditionally strengthens the US currency as it acts as a haven currency.

Barring any significant surprises in upcoming announcements, we will likely see no extreme market behaviors as we close the week. The most probable scenario is that the exchange rate will hover around 1.05 – 1.06 without breaking past the 1.0450 low.