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Introduction to EUR/USD

The EUR/USD currency pair, representing the exchange rate between the Euro (EUR) and the U.S. Dollar (USD), is one of the most traded pairs in the forex market. It is heavily influenced by economic data releases, central bank policies, and geopolitical events in both the Eurozone and the United States.

EUR/USD Market Overview

Today’s analysis of the EUR/USD pair is influenced by several key economic events. On the U.S. side, FOMC members Mary Daly and Christopher Waller are scheduled to speak, and their remarks may provide insights into future U.S. monetary policy. If they adopt a hawkish tone, it could strengthen the USD. On the Euro side, key events include remarks from German Buba President Joachim Nagel and the release of the German ifo Business Climate report. Positive comments from Nagel or a better-than-expected ifo Business Climate could provide support to the Euro. Additionally, the Belgian NBB Business Climate report will also be released, but its impact is expected to be minimal compared to the German data.

EUR/USD Technical Analysis

The EUR/USD H4 chart shows that the pair has been in a clear downtrend, characterized by lower highs and lower lows. The price has been moving within a descending channel, indicating sustained bearish momentum. Recently, the price has tested the lower boundary of the channel and is now hovering around a support area. While there have been brief bullish attempts, the overall trend remains bearish.

Key Technical Indicators

– Ichimoku Cloud: The price is trading below the Ichimoku Cloud, indicating a strong bearish trend. The cloud itself is bearish, with a future red cloud suggesting continued downward pressure. Both the Tenkan-sen and Kijun-sen lines are positioned below the cloud, reinforcing the bearish momentum.

– MACD (Moving Average Convergence Divergence): The MACD line is below the signal line, with the histogram in negative territory, confirming the bearish trend. This suggests that selling pressure remains dominant, with no immediate signs of a bullish reversal.

– RSI (Relative Strength Index): The RSI is currently at 34.91, indicating that the pair is approaching oversold conditions. While the bearish trend is strong, this could suggest the potential for a short-term corrective bounce if the RSI dips further into oversold territory.

Support and Resistance Levels

– Support Levels: Immediate support is found at 1.0667, corresponding to the 23.6% Fibonacci retracement level. A break below this level could lead the pair towards the next support at 1.0635.

– Resistance Levels: The nearest resistance level is at 1.0724, which aligns with the 38.2% Fibonacci retracement level and the upper boundary of the descending channel. Above this, resistance is found at 1.0745, near the 50% Fibonacci retracement level.

Final Words about EUR vs. USD

The EUR/USD H4 chart shows strong bearish momentum, supported by key technical indicators such as the Ichimoku Cloud, MACD, and RSI. Traders should monitor the potential for volatility around the speeches of FOMC members and the German IFo Business Climate report, as these events could significantly impact the pair’s direction. While the overall trend remains bearish, the RSI suggests that a short-term bounce could occur if the pair reaches oversold conditions. It is crucial to implement proper risk management strategies, including setting stop losses, to navigate potential market volatility.

Disclaimer: The analysis provided is for informational purposes only and does not constitute investment advice. Traders should conduct their own research and analysis before making any trading decisions. Market conditions can change rapidly, and it is essential to stay updated with the latest information.