- The EUR/USD pair reached a demand zone, so a rebound is natural.
- The US data could be decisive later.
- The price action signaled exhausted buyers.
The EUR/USD price plunged in the last hour, extending below yesterday’s lows. The pair is trading at 1.0806 at the time of writing.
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Fundamentally, the German Prelim GDP came in worse than expected, while the Spanish Flash CPI came in better than expected.
The FED is expected to deliver a 25 bps hike on Wednesday. The Federal Funds Rate should be increased from 4.50% to 4.75%. On the other hand, the European Central Bank is expected to increase the Main Refinancing Rate from 2.50% to 3.00% on Thursday.
The FOMC, ECB, and the NFP are seen as the most important events of the week, which is why the fundamental factors could change the sentiment.
Better than-expected US data today should force the currency pair to drop deeper. The CB Consumer Confidence could be reported higher at 109.1 versus 108.3 in the previous reporting period, which could be good for the greenback. The HPI and Chicago PMI figures will be released as well.
Earlier, the Eurozone data came in mixed. The Euro took a hit from German Retail Sales. The indicator reported a 5.3% drop versus the 0.1% drop expected. Later, the Eurozone Prelim Flash GDP could move the price in the short term.
EUR/USD price technical analysis: Demand zone
Technically, the EUR/USD pair failed to stay above the upper median line (UML) of the ascending pitchfork, signaling exhausted buyers. It has validated its breakdown below the median line (ML) zone, so a rebound is possible.
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A larger downside movement could be activated only if the rate drops and closes below 1.0766. From a technical point of view, failing to stay above the upper median line (UML) may announce a breakdown through the lower median line (LML). This scenario indicates a potential drop toward the downside warning line (WL1).
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