The EURUSD has been in a downtrend since March 8 after registering a high price of 1.09811, propelled by global and economic uncertainties coupled with persisting inflationary pressure and high-interest rates. Traders will be keeping a close eye on geopolitical developments and significant economic data that have the potential to affect currency valuations.
Overview
The EURUSD has been in a downtrend since March 8 after registering a high price of 1.09811, propelled by global and economic uncertainties coupled with persisting inflationary pressure and high-interest rates. Traders will be keeping a close eye on geopolitical developments and significant economic data that have the potential to affect currency valuations.
High Impact Economic Events
Tuesday, 07:15 am (GMT+0): French Flash Manufacturing PMI (EUR)
Tuesday, 07:15 am (GMT+0): French Flash Services PMI (EUR)
Tuesday, 07:30 am (GMT+0): German Flash Manufacturing PMI (EUR)
Tuesday, 07:30 am (GMT+0): German Flash Services PMI (EUR)
Tuesday, 08:30 am (GMT+0): Flash Manufacturing PMI (GBP)
Tuesday, 08:30 am (GMT+0): Flash Services PMI (GBP)
Tuesday, 01:45 pm (GMT+0): Flash Manufacturing PMI (USD)
Tuesday, 01:45 pm (GMT+0): Flash Services PMI (USD)
Technical Analysis
The EURUSD has been in a downtrend since March 8, when it reached a high price of 1.09811. Since then, it has formed consecutive lower peaks and lower troughs, indicating a technical reversal to the downside. This is known in technical analysis as a failure swing, which opened the way for a further decline in the EURUSD exchange rate. Specifically, the peak at 1.09426 failed to exceed the previous peak, 1.09811, and instead, the price fell below the trough at 1.08347, paving the way for a decline. The bearish momentum pushed the exchange rate to record the trough at 1.06010 on April 16, which was the lowest in 2024.
The 50-period Moving Average and the Momentum oscillator also support the downward outlook. Prices are trading below the Moving Average line, and the Momentum records values below its 100 baseline. On the other hand, the Stochastics emerged above the 20 oversold zone, indicating a possible upside correction.
Upside Potential Targets
If the bulls manage to take control of the market, traders may consider the following resistance levels.
1.06901: The first resistance aligns with the high price marked on April 18, which also aligns with the 23.6 percent Fibonacci Retracement drawn from the peak 1.09811 down to the trough 1.06010.
1.07462: The second level is 1.07462, matching the 38.2 Fibonacci Retracement.
1.07911: The third target is 1.07911, representing the 50 percent retracement from the swing high of 1.09811 to the swing low of 1.06010.
1.08851: The fourth key resistance level is seen at the peak 1.08851 marked on April 9.
Downside Potential Targets
Should the bears continue to dominate the market, there are three potential downside targets that traders may consider:
1.06010: The first downside target stands at 1.06010, representing the year's low.
1.05459: The second support is estimated at 1.05459, representing the 161.8 percent Fibonacci Extension drawn from the trough 1.06010 to the peak at 1.06901.
1.04568: An additional potential support could be identified at 1.04568, representing the 261.8 percent Fibonacci Extension.
Conclusion
Since March 8, the EURUSD has been experiencing a downward trend, following a peak price of 1.09811. The decline can be attributed to various factors including global and economic uncertainties, persistent inflationary pressure, and high-interest rates.
Traders must remain up-to-date with the latest geopolitical and economic developments, exercise caution, and closely monitor market trends to optimize their investments and mitigate potential risks or losses.