EUR/USD Analysis

• 20 March, 2024 Ruchit Thakur

EUR/USD Analysis

Evening Update: Will the EUR/USD pair drop further 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 significant resistance near 1.1150. Since EUR/USD is 58% weighted in DXY, the decline in EUR/USD was mostly caused by the Dollar Index's swift recovery. As we mentioned in our analysis, the Dollar Index was trading near a strong support zone of 100.50-100.80 before unexpectedly surging. 

• After a significant fall, the EUR/USD slipped below the 200 DMA. 
• The chart reveals that both the trendline and the 200 DMA have decisively rejected the EUR/USD pair; as a result, the price is projected to fall to 1.0500 and 1.0350.
• The weekly chart's 200 DMA is approaching 1.1150, where it will meet trendline resistance, indicating additional losses in the EUR/USD market.

The accompanying chart shows the EUR/USD's resistance and position relative to the weekly 200 DMA. The EURUSD is down dramatically, trading at 1.0900, with trendline resistance at 1.1150. We predicted in our DXY research that the Dollar Index would rise beyond its current trading range of 100.50 to 100.80, which acts as a solid support zone. Because EUR/USD and the Dollar Index are negatively correlated, rising DXY causes EUR/USD to fall, and vice versa. As a result, the DXY gain accounted for the vast bulk of the EUR/USD decline.

The EUR/USD pair might fall much further, with the 1.0700 and 1.0500 levels offering support for further losses. As previously said, the EUR/USD and Dollar Index are inversely connected, therefore DXY might rise to 105.50 and 107.00, respectively. Because the EUR/USD is weak and dropping, any rise presents a selling opportunity. 

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