EUR/USD Price Analysis: Bearish Bias Dominates Under 1.0700 Ahead of FOMC Minutes

At the beginning of the week, the EUR/USD pair experienced a continued decline, dropping below the 10-day moving average.

Written by: Arslan Butt • Tuesday, February 21, 2023 • 2 min read

• Last updated: Tuesday, February 21, 2023

At the beginning of the week, the EUR/USD pair experienced a continued decline, dropping below the 10-day moving average to reach 1.0670 by early Tuesday. This downward trend is supported by the Moving Average Convergence Divergence (MACD) indicator and the pair’s violation of the last support line from late November 2022.

Consequently, the EUR/USD pair bears are expected to test an upward-sloping support line from early December, currently at around 1.0620. However, the February and January lows at 1.0610 and 1.0480, respectively, are providing some support against further downside. Moreover, the swing low from early December 2022 at 1.0440 also acts as a limiting factor for further decline.

On the other hand, the 10-day moving average and the previous support line from three months ago could create resistance around the 1.0700 and 1.0730 levels. If the price breaks above these levels, the three-week-long horizontal resistance area near 1.0800–05 could act as the last hurdle for the bears.

Should the EUR/USD pair rise above 1.0805, there is a possibility of a further rally toward the psychological magnet at 1.1000 and then to the monthly high around 1.1035.

EUR/USD Daily Outlook

The EUR/USD pair has recently bounced upwards after approaching the 1.0600 barriers and testing the 1.0700 level. However, the EMA50 is exerting negative pressure on the price, halting its positive momentum and indicating a potential resumption of the bearish trend in upcoming sessions.

Additionally, the Stochastic oscillator has lost its positive momentum and entered the overbought territory, suggesting a negative motive that could push the price down toward the next main target of 1.0515. Therefore, we suggest a bearish trend for the near future, relying on the price remaining below 1.0745. It should be noted that breaching this level would cause the price to turn upwards and regain the main bullish trend.

The expected trading range for today is between 1.0590 support and 1.0745 resistance, and the expected trend for the day is bearish.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.