Wed. Jun 19th, 2024

EUR/USD PRICE ANALYSIS: NOT OUT OF THE WOODS YET, 100/200-DAY SMAS BREAKDOWN IN PLAY

EUR/USD DIVES TO FRESH FIVE-MONTH LOWS NEAR 1.0600EUR/USD DIVES TO FRESH FIVE-MONTH LOWS NEAR 1.0600

The EUR/USD pair edges higher during the Asian session on Tuesday and currently trades around the 1.0765-1.0770 area, albeit lacks strong follow-through buying.

  • EUR/USD struggles to lure buyers and is undermined by a combination of factors.
  • Reduced Fed rate cut bets continue to lend support to the USD and cap the upside.
  • Political uncertainty in Europe is further holding back the Euro bulls on the defensive. 

The EUR/USD pair edges higher during the Asian session on Tuesday and currently trades around the 1.0765-1.0770 area, albeit lacks strong follow-through buying. Moreover, the fundamental backdrop and the technical setup warrant some caution before positioning for an extension of the previous day’s modest rebound from the 1.0735-1.0730 region, or a one-month low. 

The US Dollar (USD) remains well supported by growing acceptance that the Federal Reserve (Fed) might keep interest rates higher for longer, bolstered by the stronger-than-expected US jobs data released on Friday. Adding to this, French President Emmanuel Macron’s decision to call snap elections later this month increased political uncertainty in the Eurozone’s second-biggest economy, which might continue to undermine the shared currency. This, in turn, favors bearish traders and validates the near-term negative outlook for the EUR/USD pair.

From a technical perspective, the post-NFP fall below the 100-day Simple Moving Average (SMA) near the 1.0800 mark and  a subsequent  breakdown through the 200-day SMA adds credence to the negative outlook amid bearish oscillators on the daily chart. Hence, any  further move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 1.0800 round figure. The said handle should act as a pivotal point, which if cleared decisively might prompt a short-covering rally towards the 1.0865-1.0870 supply zone en route to the 1.0900 mark.

On the flip side, the overnight swing low, around the 1.0735-1.0730 area now seems to protect the immediate downside ahead of the 1.0700 round figure. Some follow-through selling will be seen as a fresh trigger for bearish traders and drag the EUR/USD pair to the next relevant support near the 1.0650-1.0640 region. Spot prices could eventually slide towards testing the 1.0600 mark, or the YTD low touched in April.

EUR/USD daily chart

EUR/USD

Overview
Today last price1.0767
Today Daily Change0.0002
Today Daily Change %0.02
Today daily open1.0765
Trends
Daily SMA201.0847
Daily SMA501.0779
Daily SMA1001.0806
Daily SMA2001.0788
Levels
Previous Daily High1.0802
Previous Daily Low1.0733
Previous Weekly High1.0916
Previous Weekly Low1.08
Previous Monthly High1.0895
Previous Monthly Low1.065
Daily Fibonacci 38.2%1.0759
Daily Fibonacci 61.8%1.0775
Daily Pivot Point S11.0731
Daily Pivot Point S21.0698
Daily Pivot Point S31.0662
Daily Pivot Point R11.08
Daily Pivot Point R21.0835
Daily Pivot Point R31.0869

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