The Euro plunged nearly 1% against the dollar yesterday. which was the biggest intraday fall since 3 February 2023, and the pair traded 1.0565 yesterday.
Currency came under pressure after the dollar sparked above 105 its highest level after 27 February 2023. After FOMC Chairman Jerome Powell said that they are ready to increase the pace of rate hikes in his semi-annual testimony. Before the US Senate, triggering a US Dollar rally.
Market participants are expect chief Powell to clarify if he still believes the disinflationary process has begun. Whether the central bank will continue to tighten the monetary policy, and at what pace. Given the economy’s resilience and the tight labor market, it seems the Fed’s ongoing process will extend well into this year.
Across the pond, the European central bank published the monthly survey on consumer expectations. Which showed that Euro zone inflation expectations receded “significantly” for the three years ahead.
From the economic data front, Germany published January Factory Orders. Data rose by 1% MoM In January but declined by 10.9% YoY, worse than the previous -9.9%.
Today, ECB President Lagarde Speaks, German Retail Sales m/m, Final Employment Change q/q and Revised GDP q/q will bring clutter for Euro.
Technical aspect –
The EURUSD pair turned negative from the peak of 1.06945 and traded at 1.05562 levels yesterday. The Euro plunged more than 1% against the dollar.
On the daily chart, EURUSD pair broke down bearish flag pattern support at 1.05880 yesterday.
Intraday price action resulted in formation of long bearish candlestick.
The EURUSD pair is still trading below 50 SMA.
RSI 14 and its 9 MA are giving a negative crossover.
All above the technical aspects are yet creating probability for a bearish momentum in Euro.
On the downside, a break below 1.05320 levels will lead to correction in the pair. It may test 1.04885-1.04860.
On the upside, massive resistance is seen at 1.06020-1.06190