EUR/USD Analysis
Evening Update: Will the EUR/USD pair continue to tumble or rebound from its current level of 1.0830?
On the weekly chart, the EUR/USD pair is trading below the 200 DMA after encountering major resistance around the 1.1150 level. Because EUR/USD is 58% weighted in DXY, the Dollar Index's rapid recovery was the primary driver of the EUR/USD decline. As we discussed in our study, the Dollar Index was trading near a solid support zone of 100.50-100.80 and quickly rallied.
- Following a strong rejection, the EUR/USD fell below the 200 DMA.
- The EUR/USD pair was forcefully rejected by the trendline and the 200 DMA, as shown in the chart; so, the price may potentially move into the 1.05 and 1.07 zones.
- Given that the weekly chart's 200 DMA is approaching 1.1150, where it meets trendline resistance, we can expect the EUR/USD price to decline further.
The chart above shows the EUR/USD's resistance and position relative to the weekly 200 DMA. The trendline resistance is at 1.1150, and the EURUSD has fallen sharply and is presently trading in the 1.0850 zone. In our DXY research, we forecasted that the Dollar Index will rise above its current trading range of 100.50 to 100.80, which is a solid support zone. Because EUR/USD and the Dollar Index are inversely correlated, an increase in DXY causes EUR/USD to fall, and vice versa. Thus, the increase in DXY was mostly responsible for the loss in EUR/USD.
Let's now look at the EUR/USD chart with the RSI.
The chart above depicts RSI negative divergence, which occurs when the price of EUR/USD rises while the RSI falls. Negative divergence happens when the RSI trended downward while the price of a securities increased. This type of negative divergence can signal that the underlying security's price is about to revert.
The EUR/USD pair may continue to tumble, with further downside provided by the 1.0700 and 1.0500 levels. As previously said, the EUR/USD is inversely proportional to the Dollar Index, therefore DXY might rise to 103.50 and 104.20, respectively. As EUR/USD is weak and moving lower, every gain is a sell opportunity. Continue to short EUR/USD for lower goals.
Please look at the weekly EUR/USD support and resistance levels. Each level is represented by a spot chart.
|
EUR/USD |
Support |
Resistance |
|
Level 1 |
1.0700 |
1.1150 |
|
Level 2 |
1.0500 |
1.1200 |