EUR/USD Analysis

• 16 February, 2024 Ruchit Thakur

EUR/USD Analysis

Evening Update: Will the EUR/USD pair continue to decline or bounce off of its current level of 1.0750?

The EUR/USD pair is trading below the 200 DMA on the weekly chart after running into significant resistance close to the 1.1150 mark. Since EUR/USD is 58% weighted in DXY, the decline in EUR/USD was mostly caused by the Dollar Index's quick recovery. The Dollar Index was trading close to a solid support zone of 100.50-100.80, as we covered in our research, before it swiftly rose. 

• After a robust decline, the EUR/USD dropped below the 200 DMA.
• The chart indicates that the trendline and the 200 DMA forcefully rejected the EUR/USD pair; as a result, the price is anticipated to go into the 1.0500 and 1.0350 levels.
• The 200 DMA on the weekly chart is getting close to 1.1150, where it will run into trendline resistance, therefore we may anticipate additional declines in the price of EUR/USD.

The resistance and position of the EUR/USD in relation to the weekly 200 DMA are displayed in the accompanying chart. The EURUSD has dropped dramatically to trade at 1.0750, with the trendline resistance at 1.1150. We predicted in our DXY research that the Dollar Index will rise above its current trading range, which is a strong support zone, of 100.50 to 100.80. Because there is a negative correlation between EUR/USD and the Dollar Index, rising DXY leads to a fall in EUR/USD and vice versa. Therefore, the loss in EUR/USD was primarily caused by the gain in DXY.

The EUR/USD pair might fall further, with the 1.0500 and 1.0350 levels offering more support for any weakening. Since the EUR/USD and the Dollar Index are inversely correlated, as was previously mentioned, DXY might increase to 105.50 and 107.00, respectively. Any rise offers a sell opportunity because the EUR/USD is weak and falling. 

Please review the support and resistance levels for the weekly EUR/USD. Spot charts are used to represent each level.