- The EUR/USD pair signaled that the leg higher ended.
- A new lower low could activate more declines.
- The FOMC could shake the markets tomorrow.
As the Dollar Index rebounded, the EUR/USD price crashed in the short term. The greenback took the lead, but we need strong confirmation before going short on the EUR/USD pair.
–Are you interested to learn more about forex options trading? Check our detailed guide-
As you already know from my analyses, the DXY was in a corrective phase after its strong rally. Technically, the currency pair developed a swing higher. It has rebounded after its massive drop.
The price action signaled exhausted buyers already, so we cannot exclude a downside movement. Still, technically, the price is located above strong downside obstacles. The price moves sideways. That’s why we need to wait for confirmation before taking action.
Fundamentally, the German Ifo Business Climate and the Belgian NBB Business Climate came in worse than expected yesterday. Today, the US HPI rose by 1.4%, less than 1.5% expected, while the S&P/CS Composite-20HPI came in at 20.5%, matching expectations.
Later, the CB Consumer Confidence is expected to drop from 98.7 to 97.3 points. This could be bad for the USD. In addition, the Richmond Manufacturing Index could be reported at -13 points versus -11 points in the previous reporting period, while the New Home Sales indicator may drop from 696K to 663K.
As you already know, the FOMC could bring high volatility and sharp movements tomorrow. That’s why you need to be careful.
EUR/USD price technical analysis: Range formation
The EUR/USD pair was trapped between 1.0269 and 1.0155 levels. It has escaped from this range pattern but found support on the 1.0129 and the ascending pitchfork’s lower median line (LML).
–Are you interested to learn about forex robots? Check our detailed guide-
The sell-off was stopped by the confluence area formed between these downside obstacles. It has rebounded and could test the 1.0155 static resistance. Its failure to make a new higher high signaled that the buyers were exhausted and that the sellers could retake the lead. A new lower low, a valid breakdown through the confluence area, may announce more declines.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
