EUR/USD: Downtrend For 1.1495 Critical Support

The EUR/USD has already broken through resistance at 1.1612/04, which functioned as a support level for the declines that occurred in September and November 2020, respectively. Analysts at Credit Suisse maintained a bearish forecast for the currency pairing 1.1495 soon. As soon as the pair breaks above 1.1695/1.1711, the bearish position for its first central target at 1.1495/93 is set – the important March 2020 high as well as the 50 percent reversal of this increase from its 2020 low. It is anticipated to act as a stable temporary floor for the foreseeable future.

In the short term, the inclination would be to see the gain from 1.1495/93 as momentary and then watch for a dip under here in coming days, with support projected next at 1.1370, then the 61.8 percent retrace of the rebound from the 2020 bottom at 1.1290, and then stability is seen at 1.1290. The immediate barrier has moved up to 1.1663, and 1.1695/1.1711 acting as an appropriate limit to reduce the immediate danger to a bare minimum. A fake breach would be signaled only if the price rose over 1.1756.

Review Of The Technical Aspects

EUR/USD CHART Source: Tradingview.com

According to the four-hour Relative Strength Index (RSI), the Euro/Dollar is depressed, with the indicator reading significantly below 30. This indicates the presence of a bounce. Along with moving averages, additional bearish indicators such as simple moving averages (SMAs) exist.

Initial support is located at 1.1590, which was Wednesday’s low and the weakest level since November 2020. It is followed by 1.1550 and 1.15, which are both at year-ago levels. Along with the daily high of 1.1610, there is some opposition at 1.11660, which previously functioned as a support system for EUR/USD. The next two lines are worth noting: 1.1680 and 1.17.

Outline of the Fundamentals

The Greenback is gaining steam ahead of the Federal Reserve’s upcoming rate-cutting announcement. The prospect of reduced Fed asset purchases resulted in a sell-off of US Treasuries, which raised interest rates. Earlier this week, the Dollar strengthened on “risk-off” sentiment.

On Thursday morning, the Dollar fell against the Euro and other major currencies. The US Congress, according to reports, will pass funding through December 3, averting a major government shutdown. Germany releases its preliminary September Consumer Price Index (CPI), which is likely to show strong inflation.

A high German CPI could boost the Euro. Subsequently in the day, Fed Chair Jerome Powell will speak before a House Committee, his third media appearance in two days. Unemployment claims will drop from last week’s 351,000. The Dollar’s foundations remain dominant.

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