EUR/USD Analysis
Evening update: Will the EUR/USD pair fall further or rebound from its current level of 1.0790 ?
On the weekly chart, the EUR/USD pair is trading below the 200 DMA after encountering strong resistance near 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 analysis, the Dollar Index was trading near a strong support zone of 100.50-100.80 before quickly surging.
- Following a strong rejection, the EUR/USD fell below the 200 DMA.
- The EUR/USD pair was strongly rejected by the trendline and the 200 DMA, as indicated in the chart; therefore, the price is expected to move into the 1.0500 and 1.0700 ranges.
- Given that the weekly chart's 200 DMA is approaching 1.1150, where it will encounter trendline resistance, we can expect the EUR/USD price to fall even further.
The accompanying chart 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 to trade at 1.0790. In our DXY analysis, we forecasted that the Dollar Index will go above its current trading range of 100.50 to 100.80, which is a solid support zone. EUR/USD and the Dollar Index are negatively connected, therefore rising DXY causes EUR/USD to decline and vice versa. Thus, the increase in DXY was mostly responsible for the loss in EUR/USD.
Let us have a look at the EUR/USD chart with RSI.
The accompanying chart depicts RSI negative divergence, which occurs when the EUR/USD increases while the RSI falls. Negative divergence happens when the RSI declines while the price of a security rises. This type of negative divergence may signal that the underlying security's price is about to revert.
The EUR/USD pair may continue to tumble, with additional weakness provided by the 1.0700 and 1.0500 levels. As previously indicated, the EUR/USD is inversely proportional to the Dollar Index, therefore DXY might rise to 105.50 and 107.00, respectively. Because the EUR/USD is weak and trending downward, any increase provides a sell opportunity.
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 |