EUR/USD To Test Another Major Support As Dovish ECB Weighs


EUR/USD nosedived last week following the dovish monetary policy stance by the European Central Bank (ECB) and concerns regarding another inflation slowdown across the Eurozone during May. The pair broke the long term channel support and looks set to test another trendline support in the near future. The sentiment remains bullish due to Higher High (HH) in the recent upward wave.

Technical Analysis

 As of this writing, the pair is being traded near 1.3761. A support may be noted around 1.3750 which is the 76.4% fib level ahead of 1.3739, 100 Simple Moving Average (SMA) and then the trendline support as demonstrated in the following chart. A break and daily closing below the trendline could incite a renewed selling interest, opening doors for a deeper correction below the 1.3600 handle.


On the upside, the pair is likely to face a hurdle near 1.3800 that is the psychological number and 61.8% fib level ahead of 1.3846, the 50% fib level, and then the swing high of the previous wave. The sentiment will remain bullish as long as the 1.3672 support area is intact.

Zew Economic Sentiment Survey

Tomorrow the Zentrum für Europäische Wirtschaftsforschung will release the Eurozone economic sentiment survey. According to the median projection of different economists the economic confidence increased to 63.5 points during May as compared to 61.2 points in the month before. The report is prepared on the basis of telephonic surveys and questionnaires, a higher than expected actual outcome is considered bullish for the EUR/USD and vice versa.

Trade Ideas

Another bearish breakout ahead of the next Consumer Price Index (CPI) figure seems highly unlikely, so buying the pair around the trendline support appears to be a good strategy; the trade should be stopped out on a daily closing below the trendline. 

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting Will Stagflation Persist in the UK? EUR/GBP Volatility May Be an Indicator Market Analysis: Commodity Currencies Find Short-term Bottom USD/CAD Analysis: How the Bank of Canada Decision Affected the National Currency Commodity Currencies, Pound and Euro in Search of Medium-term Bottom

Latest articles

Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting

As expected, the decision on the interest rate had a powerful impact on the markets. Thus, the euro/US dollar pair lost more than 100 pp in just a couple of hours and updated its recent low at 1.0630,


Oil Analysis: Finally, A Bearish Reversal?

The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use


Central Bank Week Shakes Up Gold Market

Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% 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.