Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

EUR/USD Flounders Post Fed

Published 06/16/2022, 10:53 AM
Updated 07/09/2023, 06:32 AM

EUR/USD managed to make a gain in May, after four consecutive months of declines, but thus far, June has proven to be a bad month in terms of performance. After opening at 1.07322, the pair recently hit a low of 1.03593 to trade near 1.0452.

Most recently, EUR/USD has come under pressure as the Fed seeks to tighten monetary policy more aggressively, significantly outpacing similar efforts outlined by the ECB. Fears of global recession and ongoing geopolitical concerns related to the war in Ukraine have also played unfavorably for the euro.

Technical View - EUR/USD

The technical setup very much mirrors the fundamentals. EUR/USD is trading well below the 200-day exponential moving average on 4-hour, daily, and weekly time frames. This makes placing long positions risky business for the average trader.

The May 30 swing high of 1.07870 failed to produce a subsequent series of higher lows and higher highs necessary to convince traders of a big change in prospects for the single currency. Moreover, the prior congestion zone between 1.0620 to 1.0480 has proven to be more of an area of resistance than support.

EUR/USD daily chart.

Whether you are a buyer or a seller, keep your eyes peeled for a successful break and retest or outright reject the 1.055 regions. The next obvious test to the upside will be the 1.06414 level, representing the 50% Fibonacci retracement level.

The next real test will be the 1.06464 level, representing the 50% Fibonacci retracement level between the Apr. 21 swing high and May 13 swing low. A break above this level may restore the confidence in a shift in trend to the upside.

Meanwhile, if the price were to slip below the May 12 low of 1.03538, the Jan 2017 low of 1.03402 could act as support before reaching 1.02712 and the 1.01304 level. Near parity remains a critical psychological support level, which, if broken, could see market capitulation, but the market is not there yet.     

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.