EUR/USD is testing daily lows above 1.1300, having faltered its recovery from 16-month lows of 1.1264, as the recovery in the Treasury yields is lifting the demand for the greenback across the board.
The tepid market mood, in the face of persisting inflation concerns and global economic prospects, dent the sentiment around the euro while lending some support to the safe-haven US dollar.
Meanwhile, the dovish comments from the European Central Bank (ECB) policymakers continue to remain a weight on the euro, as it brings the monetary policy divergence between the Fed and the ECB back to the fore.
Attention now turns towards the ECB-speak and the US weekly Jobless Claims data for fresh trading impetus on the major.
From a short-term technical perspective, the recent sell-off that followed a brief recovery stint carved out a bear flag formation on the four-hour chart.
A four-hourly candlestick closing below the rising trendline support at 1.1308 will confirm the bearish continuation pattern, opening floors for a retest of the yearly lows.
A breach of the latter will accelerate the downside towards 1.1200.
The Relative Strength Index (RSI) has recovered from the oversold territory but remains well below the midline, suggesting that there is room for another leg lower.
On the flip side, the recovery will gain momentum only on a firm break above the rising trendline resistance at 1.1348.
The next critical upside barrier is seen at the bearish 21-Simple Moving Average (SMA) at 1.1361.
Recapturing 21-SMA is critical to negate the bearish bias in the near term.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.