EUR/USD has been on a downward trend recently, with a strong break of the 55-day EMA at 1.1031 indicating a reversal in the near term. This suggests that the currency pair may experience further downside this week, possibly targeting the 38.2% retracement level at 1.0920. If this level is broken, it could signal the continuation of the correction from the recent high of 1.1274, leading to a potential decline to the 61.8% retracement level at 1.0740. However, a move above the minor resistance at 1.1039 could neutralize the short-term bias.
Looking at the bigger picture, the rejection at the 1.1274 resistance level indicates that the corrective pattern from the 2023 high is not yet complete. The decline from 1.1213 could be part of another leg down, with a sustained break of the 55-week EMA at 1.0877 supporting this scenario and potentially pushing the pair towards the 50% retracement level at 1.0404.
In the long term, the EUR/USD pair has established a bottom at the 2022 low of 0.9534. However, the struggle to stay above the 55-month EMA at 1.1018 suggests a neutral outlook for now. The overall sentiment remains uncertain, with the need for further confirmation of the direction of the trend.
As traders and investors navigate these uncertain times, it is essential to closely monitor key levels and moving averages to gauge the strength of the current trend. Market participants should remain cautious and adapt their strategies accordingly to navigate the potential volatility in the EUR/USD pair.
