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.
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.
Forecast 2.4% vs Previous 2.4%
Forecast 0.6% vs Previous 0.4%
Forecast 3.51B vs Previous -8.78B
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.
