EUR/USD dropped below the 1.1000 figure as risk aversion took center stage in Tuesday’s session. Successive reports that the economy in the United States (US) is decelerating, and reignited fears of March’s banking crisis, triggered a flight to safety. Therefore, the EUR/USD pair is trading at 1.0971, below after hitting a daily high of 1.1067, down 0.68%.

The EUR/USD is forming a bearish-engulfing candle pattern, suggesting that sellers outweigh buyers at the time of writing. However, a daily close below April 24 open price at 1.0990 is needed to pave the way for a pullback. Once that scenario plays out, the EUR/USD first support would be the 20-day Exponential Moving Average (EMA) at 1.0928. A breach of the latter will expose the April 17 cycle low at 1.0900. the EUR/USD’s next floor will be the confluence of the April 10 low and the 50-day EMA at around 1.0829/31 before slipping towards 1.0800.

EUR/USD turned south after the Relative Strength Index (RSI) indicator on the four-hour chart rose above 70, suggesting that the pair's latest pullback is a technical correction.

On the downside, 1.1000 (psychological level, static level, 20-period Simple Moving Average (SMA) and 50-period SMA) aligns as important support. A four-hour close below that level could attract technical sellers and trigger an extended decline toward 1.0950 (100-period SMA, Fibonacci 23.6% retracement) and 1.0900 (psychological level, static level).

1.1050 (static level) acts as interim resistance before 1.1075 (end-point of the latest uptrend) and 1.1100 (psychological level).

EURUSD to extend its losses below the previous LH

Apr 25 2023