Euro hits the psychological barrier 31/10/2023

During the initial trading session of the previous trading day, the EUR/USD pair temporarily deviated from the anticipated downward trend, reaching the stop losses as mentioned in the previous analysis, positioned at 1.0600. It is worth recalling that our earlier analysis suggested that if the price consolidates above 1.0600, the pair could rebound towards 1.0640, ultimately reaching its peak at 1.0625.

Upon closer examination of the 4-hour timeframe chart, it is evident that the Euro has reverted to intraday stability below the critical psychological resistance level of 1.0600. This retreat is accompanied by clear negative signals on the Stochastic indicator, which has started to lose its upward momentum.

Given the current situation, as long as daily trading remains below 1.0600, the prevailing bearish bias remains the most probable scenario, with a target set at 1.0550. It’s important to note that breaching the 1.0550 mark would facilitate further decline, possibly leading to a visit to the subsequent target around 1.0500.

However, a shift in stability and price consolidation above 1.0600, confirmed by the closure of an hour-long candle at this level, would promptly halt the suggested bearish scenario. In such a scenario, the pair could rebound, testing 1.0640, representing the 23.60% Fibonacci retracement, and potentially rising further to 1.0670.

Please take note that today, the market is awaiting significant economic data from both the US, including the Consumer Confidence Index, and Canada, particularly the monthly gross domestic product. It is anticipated that there might be substantial price fluctuations when these news releases occur.

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.

S1: 1.0550	R1: 1.0640
S2: 1.0505	R2: 1.0670
S3: 1.0470	R3: 1.0705