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  • The EUR/USD pair could extend its rebound if it takes out the resistance area.
  • A new lower low could activate a larger downside movement.
  • The upside pressure is strong as long as it stays above the median line (ML).

The EUR/USD price trades in the red at 1.0982 after reaching the 1.0990 – 1.1019 resistance area. In the short term, the bias remains bearish despite temporary rebounds. The current pair has managed to rebound after its last sell-off as the Dollar Index retreated.

Technically, the DXY seems overbought, and it could develop a larger drop ahead of the FOMC. Still, don’t forget that the Dollar Index could register only temporary drops. The Federal Reserve is expected to raise the Federal Funds Rate from 0.25% to 0.50% tomorrow. More hawkish than expected, Fed could lift the USD. That’s why you have to be careful. The FOMC Statement and the FOMC Press Conference will definitely shake the markets. Also, the US is to release its retail sales data tomorrow, so the volatility could be huge around these events.

Later today, the US PPI is expected to report a 1.0% growth, while the Core PPI could register a 0.6% growth in February versus 0.8% growth in January. In addition, the Empire State Manufacturing Index could jump from 3.1 to 6.5 points.

Earlier, the Euro took a hit from the Euro-zone economic data. The ZEW Economic Sentiment was reported at -38.7, far below 10.3 expected, while the German ZEW Economic Sentiment dropped from 54.2 to -39.3 points, coming in way below 5.2 estimates.

EUR/USD price technical analysis: Bearish bias

eur/usd price

As you can see on the 4-hour chart, the EUR/USD pair continues to challenge the 1.0990 – 1.1019 resistance area. The upside pressure is high as long as it stays above the descending pitchfork’s median line (ML). A valid breakout, jumping, and stabilizing above 1.1019 could activate further growth in the short term.

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In my opinion, only a new lower low or a valid breakdown below the 1.0931 static support could activate a deeper drop. On the other hand, coming back and stabilizing below the median line (ML) could announce strong sellers and potential new sell-off.

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