The EUR/USD pair experienced a drop from 1.1213 to 1.0899 last week before finding some support around the 1.0920 mark. This led to a neutral stance for the upcoming week, with a possibility of some consolidation before any further movement. If the resistance at 1.1036 is not breached, there is a likelihood of a continued decline in the exchange rate.
Looking at the broader picture, the rejection at 1.1274 resistance level indicates that the corrective pattern from the 2023 high of 1.1274 is not yet complete. The current decline from 1.1213 could potentially be part of another downward movement. A sustained break below the 55-week EMA at 1.0877 would confirm this scenario and open up the possibility of a deeper decline towards the 1.0447 support level.
In the grand scheme of things, it is believed that a long-term bottom was established at 0.9534 in 2022. However, the EUR/USD pair is facing challenges in maintaining levels above the 55-month EMA at 1.1018. As a result, the overall outlook for the pair remains uncertain at this juncture.
It is important for traders and investors to keep a close eye on key support and resistance levels in the coming weeks to gauge the direction of the EUR/USD pair. Market sentiment, economic data releases, and geopolitical events will also play a significant role in determining the future movement of the currency pair. As always, it is advisable to use risk management strategies and stay informed about the latest developments in the forex market to make well-informed trading decisions.
