The Euro has been experiencing fresh bearish pressure against the US Dollar, reaching a two-month low in the European session on Thursday, as the greenback continued to strengthen due to expectations of a hawkish Federal Reserve and uncertainty surrounding the debt ceiling.
After the first quarter figure came in at 1.3% against the expected 1.1%, the stronger-than-expected US GDP reading indicated a relatively robust economic performance, which could potentially fuel expectations of a June interest rate hike by the Federal Reserve. The uncertainty surrounding the debt ceiling has exacerbated the pressure on the cross by boosting the greenback against its trading partners. Additionally, news of the German economy entering a recession in Q1 2023 has further dampened the outlook for the Euro.
The 4H chart shows that the Fiber has been under selling pressure since the bulls’ failure to break above the major resistance level at 1.10955 at the beginning of the Month. The price action has formed a descending channel trading pattern and is on course to close a fourth consecutive week in the red.
The bears have successfully breached a pivotal Fibonacci support level at 1.07375, the golden ratio of the $1.0516 (major support level) to 1.1095 (major resistance level) rally, and closed below this level, confirming a bearish signal. This development paves the way for potential tests of the 19th of March 2023 low of $1.06679 and the pre-banking crisis 10th of March 2023 low of 1.06122. However, the bulls could be confident of an opportunity to push the price higher with the RSI and the stochastic oscillator having entered the oversold region.
The EURUSD currency pair is currently in a bearish phase, with the Euro facing downward pressure against the greenback. Therefore, keeping a watchful eye on fundamental developments, such as central bank announcements and any progress on the debt ceiling issue, will be crucial for gauging the Fiber’s short-term movement.
Sources: TradingView, Reuters, MT Newswire.
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