EUR/USD ANALYSIS - Fed's Hawkish Stance Catalyzes Significant Technical Deterioration
The EUR/USD pair has exhibited substantial technical deterioration following the Federal Reserve's hawkish monetary policy stance, with price action demonstrating a decisive breakdown below critical support levels. The currency pair's trajectory has been particularly notable in its violation of multiple technical thresholds, including the psychologically significant 1.0400 level, while simultaneously registering bearish momentum confirmation through both price action and oscillator readings.
A comprehensive analysis of the intraday price structure reveals an accelerated deterioration pattern, characterized by sequential lower highs and lower lows, with particular emphasis on the breach of the 1.0400 support zone. This technical breakdown is further corroborated by the Relative Strength Index (RSI) momentum indicator, which maintains a negative trajectory without reaching oversold conditions, suggesting potential for continued downside momentum without immediate technical exhaustion signals.
The medium-term technical framework now indicates heightened vulnerability, with the currency pair's sustained position below both the 5- and 21-day moving averages establishing a robust bearish technical structure. The absence of meaningful support until the November monthly low introduces the possibility of accelerated downside movement, with subsequent support levels clustering around the 1.0200 psychological threshold. The technical damage inflicted suggests a potential paradigm shift in the pair's directional bias, with any corrective rallies likely to encounter significant resistance at previously broken support levels.