Baxia Markets
May 24, 2024

EURUSD Remains Bearish with Key Resistance Levels Intact

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The EURUSD pair has been on a downward trajectory for the past four days, reflecting a sustained bearish sentiment. Fundamentally, the pair's performance has been lackluster, with key economic indicators failing to meet forecasts. The Eurozone's quarter-to-quarter GDP growth remained stagnant at 0.2%, while the year-to-year figure showed a contraction of -0.2%. Notably, Germany's GDP also shrank by -0.2% year-over-year, contributing to the bearish momentum. The market reacted with a strong bearish pullback, testing resistance levels after a significant bearish move that set a new lower low. The recent swing high is marked at 1.0861, recorded in yesterday's session.

Today, the focus shifts to the United States as it prepares to release key economic data on Durable Goods Orders and Core Durable Goods Orders. Economists have mixed forecasts for these releases, introducing an element of uncertainty. This mixed outlook could potentially offer bulls an opportunity to reverse the current bearish trend, especially if the actual data falls short of expectations.

EURUSD Remains Bearish with Key Resistance Levels Intact

Technical analysis further supports the bearish outlook for EURUSD. A death cross, where the EMA 50 crosses below the EMA 200 on the 1-hour timeframe, has confirmed the bearish reversal. Additionally, the Ichimoku indicator shows the Tenkan-sen, Kijun-sen, and Chikou Span lines positioned below the cloud, indicating a strong bearish sentiment.

Oscillator indicators also paint a bearish picture. The MACD signal line and histogram are below the zero line, while the RSI has broken below the 40% level and has entered the oversold zone, dipping below 30%.

Key resistance levels are identified at the EMA 200 and the Ichimoku cloud. On the downside, the key support levels include the recent swing low at 1.08048 and the 161.8% Fibonacci extension of the previous swing high, located at 1.0790.

For a clear bullish reversal to occur, prices would need to move above the cloud and the EMA 200, coupled with an oversold RSI. Until these conditions are met, the EURUSD market remains firmly in bearish territory. Traders should closely monitor the upcoming U.S. economic data releases, as they could be pivotal in determining the pair's near-term direction.

Key Takeaways

  1. EURUSD has been bearish for four consecutive days.
  2. Eurozone and German GDP figures fail to meet forecasts, contributing to bearish sentiment.
  3. Upcoming US Durable Goods Orders data could influence market direction.
  4. Technical indicators confirm bearish outlook with EMA death cross and Ichimoku signals.
  5. Key resistance at EMA 200 and Ichimoku cloud; support at 1.08048 and 1.0790.

Key Economic Releases to Watch Today

EUR, German GDP (QoQ)

Actual 0.2% vs Forecast 0.2% vs Previous -0.3%

EUR, German GDP (YoY)

Actual -0.2% vs Forecast -0.2% vs Previous -0.2%

GBP, Core Retail Sales (MoM)

Actual -2.0% vs Forecast -0.6% vs Previous -0.6%

GBP, Core Retail Sales (YoY) 

Actual -3.0% vs Forecast -1.1% vs Previous 0.4%

GBP, Retail Sales (MoM)

Actual -2.3% vs Forecast -0.5% vs Previous -0.2%

GBP, Retail Sales (YoY)

Actual -2.7% vs Forecast -0.2% vs Previous 0.4%

USD, Core Durable Goods Orders (MoM)

Forecast 0.1% vs Previous 0.2%

USD, Durable Goods Orders (MoM)

Forecast -0.9% vs Previous 2.6%

CAD, Core Retail Sales (MoM)

Forecast 0.3% vs Previous -0.3%

CAD, Retail Sales (MoM)

Forecast -0.1% vs Previous -0.1%





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