Just like the GBPUSD, at the moment our view is also bearish on the EURUSD pair. EUR / USD is trading well below 1.18, a two-week low, as the market’s cautious mood boosts the safe haven dollar. Concerns about rising US inflation, the Fed’s waning intentions and the German election are pushing the pair lower.
EUR / USD lost ground for the second session in a row and moved below key support at 1.1800 to post new multi-week lows around 1.1770.
The renewed weakness surrounding the pair comes in response to the continued rally in the dollar, which in turn pushes the US Dollar Index (DXY) to new highs at levels just below the 93.00 barrier.
On the daily chart, price rebounded through the descending channel but encountered resistance at 1.19090. He broke the ascending support line that he was following throughout the rally and plunged to the resistance line of the horizontal channel, failed to switch it to support and is now moving below. The target should be around 1.16630 (or 1.17000). Note that it is almost as if the price has formed a missed double top on the day, so the short entry should probably be around 1.18000 / 18200 which corresponds to the 61.8 fibo area.
EUR / USD levels to watch So far the spot loses 0.16% to 1.1790 and faces the next upside barrier at 1.1909 (September 3 high), followed by 1.1937 ( SMA of 100 days) and finally of 1.2000 (psychological level). On the flip side, a break below 1.1774 (September 13 low) would target 1.1704 (March 31 monthly low) en route to 1.1663 (2021 August 20 low).
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