EUR/USD 240 Minute Chart Analysis
The current situation of the EUR/USD pair in the 240-minute timeframe suggests a bearish downtrend, having found support at the 1.07600 level. With the price residing below both the 50 and 200-day moving averages, the bias for the pair skews towards the bearish side. However, an upward pullback towards the 38.2% Fibonacci retracement level at 1.08869 may come into play, especially if the market embarks on an uptrend. Currently, RSI and short-term momentum reveal a slight bullish bias, an anomaly in an otherwise bearish overall sentiment, but these views are only short term.
From the peak in May, the market has retreated close to -3%, suggesting a significant corrective move. Key levels to monitor include the Fibonacci 38.2% retracement at 1.08869 as potential resistance and an important support corridor spanning from 1.07828 to 1.07375. The 50 Day MA, lying at 1.08671, may also be leveraged as psychological support.
Looking ahead, the course of the EUR/USD pair could be significantly influenced by several upcoming key economic announcements. The U.S. CPI data, set to be unveiled on May 23, 2023, if above expectations, could solidify the Fed’s aggressive rate hike trajectory and apply downward pressure on the EUR/USD pair. On May 24, 2023, the European Central Bank (ECB) could further elucidate its plans to wind down its asset purchase program, potentially causing headwinds for the pair given the program’s role as a bulwark for the euro. Furthermore, on May 25, 2023, if the Beige Book insinuates a broadening inflationary landscape in the U.S., the anticipation of more forceful Fed rate hikes may pull the pair downwards. Therefore, traders should keep a vigilant eye on these pivotal events and be ready to adapt their positions as needed. The interplay between these data points, technical chart points, and the broader macroeconomic picture, will likely shape the future trajectory of the EUR/USD.