EUR/USD Pair Sees Buying Interest After Drop to 1.0640, But Faces Mixed Signals and Obstacles

During the Asian session, the EUR/USD pair dropped to approximately 1.0640 but has since seen a surge in buying interest as a market.

Arslan Butt•Wednesday, February 22, 2023•1 min read

During the Asian session, the EUR/USD pair dropped to approximately 1.0640 but has since seen a surge in buying interest as market players’ risk appetite has increased. Although the US Dollar Index (DXY) is trying to recover from a corrective move, the bullish risk impulse is not yet strong as investors await the Federal Open Market Committee (FOMC) minutes.

In the Asian session, S&P 500 futures rebounded after a severe sell-off on Tuesday, attributed to extended weekend volatility and robust preliminary US S&P PMI readings. European Central Bank (ECB) President, Christine Lagarde, has affirmed the ECB’s intent to raise key rates by 50 basis points (bps) at the next policy meeting despite headline inflation decreasing. She also noted that the Eurozone is not experiencing a wage-price spiral.

The 61.8% Fibonacci retracement level of 1.0693 is being continuously tested, while the Symmetrical Triangle chart pattern’s formation suggests a decrease in volatility. The 100-period Exponential Moving Average (EMA) around 1.0700 could pose a significant obstacle for Euro bulls. Additionally, the Relative Strength Index (RSI) (14) is approaching the bearish zone of 20.00-40.00, which could trigger a downward momentum.

If the asset suffers a significant decline below the February 17 low of 1.0613, it could head towards the December 22 low of 1.0573 and even down to the January 6 low of 1.0483. However, a break above the February 16 high of 1.0722 could propel the asset towards the 50% Fibo retracement level of 1.0758, followed by the February 14 high of 1.0800.

Overall, the EUR/USD pair is currently dealing with mixed signals and potential obstacles that could lead to both upward and downward momentum in the near future.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

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.