Hello, dear traders!
Yesterday, the US dollar was still in demand among market participants. It also strengthened against the euro. The US economy is recovering from the COVID-19 pandemic at a quicker pace unlike the European Union. In this light, market participants expect the US Federal Reserve to change its stance on monetary policy earlier than the European Central Bank. This means that the American regulator may increase interest rates sooner than any of the world’s leading central banks. At the same time, the pandemic is still weighing on the euro. In fact, Germany and France are contemplating tougher restrictions aimed to curb the spread of the virus. Some experts link the strengthening of the US dollar to a change in bond yields. However, this factor affects the currency in different ways. That is why there is no point in discussing it. Now, let us conduct technical analysis of EUR/USD.
Last week, trading, as well as candlesticks from March 25 and 26, closed below the important level of 1.1800. The third candlestick closed below this mark yesterday. Bulls tried to return the quote above this level but failed. As a result, the pair consolidated below 1.1800 and the bearish trend extended. Today, the price continues going down. At the moment of writing, EUR/USD is trading slightly below the important technical and historic level of 1.1745. If the trend goes on, the bearish target will be located at 1.1700. If the price breaks through it, it may plunge even further. In order to change the situations, bulls should return the quote to 1.1800 and close above it. In such a case, the pair may go up to 1.1830 and even to 1.1860 where there is an orange EMA 200 and red Tenkan-sen. This scenario seems less likely at the moment. The pair is under bearish control especially given consolidation below 1.1800.
According to the H1 chart, pressure on the euro is growing. The pair is breaking through the support level of 1.1760. After three candlestick close below it, you can sell EUR/USD when the price rebounds to this mark. Also, you can look for points to enter short positions if the price returns to 1.1800. However, this scenario seems unlikely at the moment. The most important event today will be the publication of the consumer confidence index in the United States. Anyway, the report will not have any impact on EUR/USD.
Have a nice trading day!
The material has been provided by InstaForex Company – www.instaforex.com
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