Baxia Markets
June 27, 2024

Euro Faces Critical Test: Will 1.0640 Support Level Hold?

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The Euro (EUR) is teetering on a potential further decline, with critical attention on the support level at 1.0640, marked distinctly in an orange rectangle. If the EUR dips below this threshold, it could lead to a prolonged downward trend.

Two days ago, the EUR dropped to 1.0689 before making a slight recovery. Yesterday, there was a marginal increase in momentum, hinting at a possible dip below the 1.0689 mark, though it seemed unlikely that major support at 1.0670 would be challenged. Contrary to this expectation, the EUR fell further, hitting a low of 1.0664. Today, another decline in the EUR is possible, but it remains uncertain whether it can breach the significant support level at 1.0640. The 1.0665 level continues to act as strong support. On the upside, resistance stands at 1.0695, and a break above 1.0710 would signal that the EUR's weakness has stabilized.Euro Faces Critical Test: Will 1.0640 Support Level Hold?

In an analysis from two days ago (when the EUR was at 1.0730), it was suggested that the EUR had likely entered a consolidation phase, expected to trade between 1.0670 and 1.0800. However, the EUR dropped to a low of 1.0664 yesterday. Although downward momentum is increasing, it has not yet reached the point of a sustained decline. The crucial support level at 1.0640 remains pivotal. As long as the EUR does not breach the 1.0730 level, it is likely to remain under pressure, with a sustained decline only probable if it clearly breaks below 1.0640.

Technical Indicators

Technical indicators are bearish:

  • The EMA 50 is positioned below the EMA 200, indicating a bearish trend.
  • The MACD signal line has fallen below 0.
  • The RSI has breached the 40% level and turned red.
  • The Chikou span, Kijun-sen, and Tenkan-sen lines have failed to break above the cloud and are retreating.

These signals collectively point towards a bearish outlook for the EURUSD.

Key Economic Releases to Watch Today

Time (GMT) Currency Event Impact Actual Forecast Previous
06:50 JPY Retail Sales YoY Medium 3% 2% 2.4%
08:00 NZD ANZ Business Confidence Medium 6.1 10.2 11.2
15:00 EUR Business Confidence Medium 86.8 88.7 88.4
-- EUR Consumer Confidence Medium 98.3 97 96.4
16:00 EUR Economic Sentiment Medium 96.2 96 --
17:00 AUD RBA Hauser Speech Medium -- -- --
18:30 EUR Business Confidence Medium -5 -6.3 --
19:30 USD GDP Growth Rate QoQ Final High   1.4% 3.4%
19:30 USD GDP Price Index QoQ Final High   3.1% 1.7%
19:30 USD Core PCE Prices QoQ Final High   3.6% 2%
19:30 USD Durable Goods Orders Ex Transp MoM Medium   0.2% 0.4%
19:30 USD Durable Goods Orders ex Defense MoM Medium   -0.1% 0%
19:30 USD Durable Goods Orders MoM Medium   -0.1% 0.7%
19:30 USD Initial Jobless Claims High   236K 238K
19:30 USD Wholesale Inventories MoM Adv Medium   0.1% 0.1%
19:30 USD Goods Trade Balance Adv Medium   $-96B $-99.41B
19:30 USD Retail Inventories Ex Autos MoM Adv Medium   0.2% 0.3%
21:00 USD Pending Home Sales MoM Medium   2.5% -7.7%
21:00 USD Pending Home Sales YoY Medium   2.5% -7.4%


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