- The bias remains bearish despite the last rebound.
- The BOC could have a big impact on the USD today.
- Taking out the pivot point activates further drop.
The EUR/USD price pared gains on Wednesday, continuing yesterday’s momentum. The pair is trading at 1.0575 versus yesterday’s high of 1.0694. The dollar’s dominance forces risky assets to depreciate.
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The price maintains a bearish bias despite temporary rebounds. Fundamentally, the greenback took the lead after the United States Flash Manufacturing PMI and Flash Services PMI confirmed expansion yesterday.
On the other hand, the Eurozone, German, and French services and manufacturing sectors remained deep in contraction territory. Today, the German ifo Business Climate came in at 86.9 points, versus 85.9 points expected and compared to 85.8 points in the previous reporting period. In addition, the M3 Money Supply reported better than expected data, while Private Loans disappointed.
Later, the BOC is seen as a high-impact event that could really shake the markets. The overnight rate is expected to remain at 5.00%. Still, the BOC Press Conference could bring sharp movements. Furthermore, Fed Chair Powell Speaks, ECB President Lagarde Speaks, and US New Home Sales should have an impact on the greenback.
EUR/USD Price Technical Analysis: Rebound Ended
From the technical point of view, the EUR/USD pair found resistance at the confluence area formed at the intersection between the lower median line (LML) of the ascending pitchfork with the R2 (1.0680). Now, it has dropped below the warning line (WL), which represents dynamic support.
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Staying on this obstacle announced an imminent breakdown. It challenges the weekly pivot point of 1.0570. Taking out this downside obstacle announces more declines. The 1.0600 psychological level represents a supply zone. Retesting it may result in a new sell-off.
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