EUR/USD Analysis

• 26 February, 2024 Ruchit Thakur

EUR/USD Analysis

Evening Update: Will the EUR/USD pair continue to drop or rebound from its current level of 1.0850 ?

The EUR/USD pair is trading below the 200 DMA on the weekly chart after encountering major resistance near the 1.1150 level. Since EUR/USD is 58% weighted in DXY, the decline in EUR/USD was mostly caused by the Dollar Index's rapid recovery. As we reported in our analysis, the Dollar Index was trading within a sturdy support zone of 100.50-100.80 before quickly rising. 

• Following a strong slump, the EUR/USD fell below the 200 DMA.
• The chart shows that the trendline and the 200 DMA both strongly rejected the EUR/USD pair; as a result, the price is expected to fall to the 1.0500 and 1.0350 levels.
• The weekly chart's 200 DMA is approaching 1.1150, where it will encounter trendline resistance, therefore we may see further losses in the EUR/USD market.

The accompanying chart displays the EUR/USD's resistance and position relative to the weekly 200 DMA. The EURUSD has fallen sharply to trade at 1.0850, with trendline resistance at 1.1150. We forecasted in our DXY analysis that the Dollar Index would rise beyond its current trading range of 100.50 to 100.80, which serves as a strong support zone. Because EUR/USD and the Dollar Index have a negative correlation, rising DXY causes EUR/USD to fall, and vice versa. As a result, the gain in DXY accounted for the majority of the EUR/USD loss.

The EUR/USD pair might fall much more, with the 1.0700 and 1.0500 levels providing additional support for any weakness. As previously noted, the EUR/USD and the Dollar Index are inversely correlated, therefore DXY might rise to 105.50 and 107.00, respectively. Because the EUR/USD is weak and declining, every gain represents a selling opportunity. 

Please analyze the weekly support and resistance levels for the EUR/USD. Spot charts are used to depict each stage.