EUR/USD Analysis

• 02 January, 2024 Ruchit Thakur

EUR/USD Analysis

Evening Update: Will there be further crack in the EUR/USD pair as it retraced from 1.1150?

The EUR/USD pair is currently trading below the 200 DMA on the weekly chart, having faced significant resistance from the 1.1150 zone. Since EUR/USD is 58% weighted in DXY, the Dollar Index's sharp rebound was the primary driver of the EUR/USD fall. As we discussed in our study, the Dollar Index was trading close to a strong support zone of 100.50–100.80.

• Following a significant rejection, the EUR/USD dropped below the 200 DMA.
• According to the chart, the trendline and the 200 DMA strongly rejected the EUR/USD pair, and it may now go into the 1.07 and 1.05 zones, respectively.
• Since the weekly chart's 200 DMA is positioned in the vicinity of 1.1150, where trendline resistance and 200 DMA converge, we may anticipate further decline in EUR/USD price.

Please refer to the above mentioned chart, which shows the resistance in the EUR/USD and how it is facing the 200 DMA on the weekly chart. The 1.1150 zone is also the trendline resistance and the EUR/USD came down sharply and is trading near to 1.0950 zone as of right now. When we talked about DXY in our study, we pointed out that the Dollar Index was trading in a strong support zone between 100.50 and 100.80 and it might spike higher. The Dollar Index is inversely proportional to EUR/USD, meaning that if DXY rises, EUR/USD falls, and vice versa. As a result, the loss in EUR/USD was mostly caused by the up move in DXY.

The EUR/USD pair could continue to weaken, with the 1.0700 and 1.0500 zones offering further downside. Since the EUR/USD is inversely proportional to the Dollar Index, as previously indicated, DXY may rise to the 1.0350 and 1.0400 zones, respectively.

Please check the support and resistance level of EUR/USD on the weekly chart. All levels are in spot chart :