Baxia Markets
May 17, 2024

EURUSD Hits Deep Retracement at 61.8%

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The EURUSD pair has entered a deep retracement, currently hovering around the 61.8% Fibonacci level. This significant technical point indicates a substantial pullback from recent highs. Market participants are closely watching today's key economic release: the Consumer Price Index (CPI) from the European Union. Economists forecast a flat year-over-year CPI, with a potential increase on a quarterly basis, which could influence market sentiment and trading decisions.

In the 1-hour time frame technical analysis, the 50-day Exponential Moving Average (EMA) is positioned above the 200-day EMA but is trending downward towards the 200-day EMA. This alignment suggests a weakening bullish sentiment. Traders should watch the 50% Fibonacci retracement level at 1.0857 as a critical resistance point. Conversely, the key support level is at 1.0831, near the Fibonacci cloud, which could play a pivotal role in halting further declines.
EURUSD Hits Deep Retracement at 61.8%
The Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) both indicate bearish sentiment. The MACD signal line is below the zero level, highlighting negative momentum. The RSI is below the 50% mark, reinforcing the bearish outlook. Importantly, the RSI has not yet reached the oversold zone, implying that the prices may continue to fall slightly before finding a solid support base and potentially reversing back to a bullish trend continuation.

Overall, the EURUSD is navigating a deep retracement phase, with critical economic data from the EU likely to impact its near-term direction. The weakening bullish sentiment, as suggested by the EMA alignment, coupled with bearish signals from MACD and RSI, indicates that traders should prepare for further downward movement. However, the possibility of a bullish reversal remains if the key support level at 1.0831 holds and economic data provides positive surprises.

Key Takeaways:

  1. EURUSD has entered a deep retracement, hitting the 61.8% Fibonacci level.
  2. EU CPI data is anticipated to show flat year-over-year and increased quarterly figures.
  3. On the 1-hour chart, the EMA 50 is above the EMA 200 but trending downward, indicating weakening bullish sentiment.
  4. Key resistance is at the 50% Fibonacci retracement level of 1.0857, and key support is at 1.0831.
  5. MACD and RSI indicators are bearish, with the RSI not yet reaching oversold, suggesting potential for further price drops.

Key Economic Releases to Watch Today


Forecast 2.4% vs Previous 2.4%


Forecast 0.6% vs Previous 0.4%

CAD, Foreign Securities Purchases

Forecast 3.51B vs Previous -8.78B



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