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The EURUSD pair declined significantly yesterday, affected by the positivity of the US dollar, after Jerome Powell’s testimony before Congress, nullifying the expected bullish path. As a reminder, we indicated that closing an hourly candlestick below 1.0640 leads the euro-dollar pair to the bearish path again, with targets starting at 1.0590 and reaching 1.0560, recording Its lowest level during the morning trading for today’s session is 1.0533, compensating the long position.
Technically, today, we find the pair succeeded in breaking the support floor at 1.0640 and turned into resistance. The simple moving averages started to cross negatively and put pressure on the price from above and the negative signals from the RSI.
Therefore, the idea of continuing the decline is valid and effective, but on the condition that we witness a clear and strong break of the strong support floor 1.0515 represented by Fibonacci correction, and that enhances the chances of a drop towards 1.0475, the first target, and then 1.0425, a next official station, whose targets may extend later to visit 1.0360.
Price’s consolidation again above 1.0640 will immediately stop the suggested scenario and lead the Euro-dollar pair to retest 1.0745, the 61.80% correction.
Note: Today, we are awaiting high-impact economic data, and we may witness high volatility in prices, and irregular movements may occur:
- ADP Employment Change
- JOLTS Job Openings in US and Employment Change in Eurozone
- The semi-annual testimony of Jerome Powell, Chairman of the Federal Reserve, before the Senate.
- ECB’s President Lagarde’s speech
- Bank of Canada interest rate decision and statement.
Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.
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