The EUR/USD currency pair experienced a decline last week, dropping from 1.1213 to 1.0495 before bouncing back slightly. The initial bias for this week remains neutral for consolidations. However, the overall outlook remains bearish as long as the 1.0760 support turned resistance level holds. If 1.0495 is broken, the next targets are 1.0447 and then the key Fibonacci level at 1.0404.
Looking at the bigger picture, the price movements from the 1.1274 high in 2023 are considered a consolidation pattern within an upward trend from the 2022 low of 0.9534. The recent fall from 1.1213 is viewed as the third leg of this pattern. The downside is expected to be limited by the 50% retracement level of 0.9534 to 1.1274 at 1.0404, which could lead to a resumption of the upward trend in the future. However, a decisive break below 1.0404 would increase the likelihood of a reversal, targeting the 61.8% retracement at 1.0199.
In the long-term perspective, it is believed that a bottom was formed at 0.9534 in 2022. Currently, the EUR/USD pair is facing challenges in maintaining levels above the 55-day Exponential Moving Average (EMA) at 1.1011. As a result, the outlook for the pair is considered neutral at best for the time being.
It is essential for traders and investors to closely monitor the key support and resistance levels mentioned in the analysis to make informed decisions regarding their positions in the EUR/USD currency pair. Market conditions and economic factors can quickly change, impacting the direction of the pair. By staying informed and conducting thorough analysis, traders can navigate the volatility of the forex market more effectively.
