The EURUSD currency pair is one of the most widely traded and significant pairs in the foreign exchange market. It represents the exchange rate between the Euro (EUR), the official currency of the Eurozone, and the United States Dollar (USD), the official currency of the United States.
The EURUSD pair is often referred to as the “Eurodollar” or simply the “Euro.” It is known for its high liquidity and is considered a major currency pair, reflecting the economic and political conditions in both the Eurozone and the United States. Traders and investors closely watch this pair as it can be influenced by a variety of factors, including interest rate differentials, economic data releases, central bank policies, and geopolitical events.
The movements in the EURUSD pair are a crucial indicator of global market sentiment and often serve as a benchmark for other currency pairs. Traders use technical and fundamental analysis to make informed trading decisions in the dynamic and ever-changing foreign exchange market.
Today we’re looking at the EURUSD in Forex trading market as price has returned to key support after yesterday’s sell-off, after what looks like a reaction to US retail sales and fed comments.
Looking at the daily we can see that 1.1705 is a strong level for buyers. This level has held since November 2020. Since then we have seen one bounce in March and three touches in August.
Yesterday, US retail sales missed expectations with the core figure dropping to -1.1%. Fed chair Powell’s comments early this morning also hurt risk due to their hawkish tone. Markets will be looking to the Fed meeting minutes and if we will see any plan in tapering.
Could the minutes be a fail nail in the support coffin for the EURUSD? A break lower continues to confirm the last lower high and suggests a new continuation lower that could maintain the current medium-term down trend that remains in play. If we do see an extension lower could buyers put up some fight at support 2 if reached?
If momentum turns back to buyers a new hold at this level will continue to maintain buyer control from 1.1705 and reinforce buyer numbers in defending the level.
To us, it’s a crossroads in a way for the EURUSD and it’s going to be interesting to see if sellers can take the next step.
Recommendation: Sell/Sell limit @ 1.17500 Target/TP: 100+ pips Trailing Stop: 20 pips
EURUSD analysis on dated 23-01-2020