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28/08/24
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EUR/USD Under Pressure: Key Levels and Market Sentiment Analysis
The EUR/USD currency pair experienced a slight decline on Wednesday following modest gains on the previous day. Currently, the pair trades below the key psychological level of 1.1150, with support anticipated around 1.1100. Traders are not expecting significant economic data releases that could influence the pair’s movement today, leading to a focus on changing risk perceptions and technical indicators.
Despite a positive shift in market sentiment that boosted EUR/USD during the American session on Tuesday, the pair remains vulnerable early Wednesday. U.S. stock index futures indicate a largely unchanged trading environment, which suggests a neutral risk atmosphere ahead of the latter part of the week. Attention is directed toward upcoming data releases, including the German Consumer Price Index (CPI) and revised Gross Domestic Product (GDP) figures from the U.S., which may drive significant market action.
On the technical front, EUR/USD has positioned itself within the lower range of an ascending regression channel that began in early August. The Relative Strength Index (RSI) has dipped below 50, signaling a waning bullish momentum. The support region between 1.1110 and 1.1100 is critical, with a failure to maintain levels above this zone potentially inviting further selling pressure. If this occurs, the next target for sellers could be around 1.1040, which aligns with the 100-period Simple Moving Average and a Fibonacci retracement level.
Conversely, the resistance levels are found between 1.1190 and 1.1200, extending to the upper limit of the channel at approximately 1.1250. An upward movement past these levels would signify renewed bullish intent for the pair. Investors will be closely monitoring these technical aspects and upcoming economic indicators as they assess the future direction of EUR/USD.
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