EUR/USD Price Analysis: Weakening near multi-month lows
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The EUR/USD pair started the new week with a slight downtrend and fluctuated in a narrow trading range, around the mid-1.0600 level during the Asian trading session. Meanwhile, spot prices remain within striking distance of their lowest since March touched last Friday and appear vulnerable to an extension of the downward trajectory witnessed over the past two months or so. .
The US Dollar (USD) stands near its highest level in more than 6 months and remains well supported by rising US Treasury yields, supported by the Federal Reserve's hawkish outlook (Fed) and the expected reduction in the number of interest rate cuts in 2024. On the other hand, the common currency was weakened by the dovish interest rate decision of the European Central Bank (ECB) on Thursday Previously, this further contributed to limiting the EUR/USD pair.
From a technical perspective, the negative outlook is reinforced by the fact that the decline from the 1.1275 area, or the 17-month peak reached in July, has been along a downward sloping channel. This points to a clearly established bearish trend and suggests that the path of least resistance for the EUR/USD pair is to the downside. Furthermore, the oscillators on the daily chart are deep in negative territory and are yet to fall into the oversold zone.
Therefore, further slide towards the 1.0600 circle, en route to ascending channel support, currently pegged near the 1.0560-1.0555 area, appears a distinct possibility. Some further selling would mark a new decline and set the stage for the EUR/USD pair to extend its two-month downtrend.
The US Dollar (USD) stands near its highest level in more than 6 months and remains well supported by rising US Treasury yields, supported by the Federal Reserve's hawkish outlook (Fed) and the expected reduction in the number of interest rate cuts in 2024. On the other hand, the common currency was weakened by the dovish interest rate decision of the European Central Bank (ECB) on Thursday Previously, this further contributed to limiting the EUR/USD pair.
From a technical perspective, the negative outlook is reinforced by the fact that the decline from the 1.1275 area, or the 17-month peak reached in July, has been along a downward sloping channel. This points to a clearly established bearish trend and suggests that the path of least resistance for the EUR/USD pair is to the downside. Furthermore, the oscillators on the daily chart are deep in negative territory and are yet to fall into the oversold zone.
Therefore, further slide towards the 1.0600 circle, en route to ascending channel support, currently pegged near the 1.0560-1.0555 area, appears a distinct possibility. Some further selling would mark a new decline and set the stage for the EUR/USD pair to extend its two-month downtrend.
Note
This pair has reached the support zoneNote
Note
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