- The EUR/USD pair rebounded but the outlook remains bearish.
- A new lower low activates more declines towards the historical level.
- The US data should bring high action tomorrow.
The EUR/USD price dropped as low as 1.0524 yesterday, registering a new weekly low.
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Now, the pair has rebounded and is trading at 1.0559 at the time of writing.
After its amazing drop, the price tries to recover but the downside pressure remains high. You already know that the currency pair crashed ahead and after the Fed Chair Powell Testifies on Tuesday.
The Federal Reserve is expected to continue hiking rates in the next monetary policy meetings. At least a 25 bps hike is expected in the March meeting. The US is to release its inflation data next week. Higher inflation reported in February could force the FED to deliver a 50-bps hike again.
Yesterday, the US JOLTS Job Openings and the ADP Non-Farm Employment Change reported positive data, but the greenback is overbought in the short term.
Today, the US Unemployment Claims could bring life to the EUR/USD pair. The economic indicator is expected at 195K in the last week compared to 190K in the previous reporting period.
Also, the US economic figures could really shake the markets tomorrow. The Non-Farm Payrolls is expected at 224K in February versus 517K in January, Unemployment Rate is expected to remain steady at 3.4%, while Average Hourly Earnings may report a 0.3% growth again.
EUR/USD price technical analysis: Bearish pressure
Technically, the currency pair failed to stay below the descending pitchfork’s median line (ml) and under the 1.0532 former low signaling exhausted sellers.
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Now, it has rebounded within an up channel pattern. Still, this formation could announce a downside continuation if activated. The flag’s upside line represents an upside obstacle. As long as it stays below it, the rebound could be only a temporary one.
Only a valid breakout through the upside line activates a larger rebound. A new lower low, a valid breakdown below 1.0532 and coming back below the median line (ml) activates a deeper drop at least towards 1.0481 historical level.
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