VOT Research Desk
After suffering significant losses on Monday, the EUR/USD appears to have stabilised at about 1.0250 early on Tuesday, although it may be challenging to make a recovery in the immediate future.
As investors evaluate the most recent remarks from European Central Bank (ECB) officials, the Euro (EUR) is having difficulty finding buyers. The US Dollar (USD), on the other hand, maintains its position despite the fragile risk sentiment. The technical picture, however, indicates a bearish outlook for EUR/USD. The risk perception is likely to continue to affect the USD’s valuation in the second part of the day in the absence of important macroeconomic data releases.
US stock index futures were slightly down as of the time of writing. The USD may gain strength if the major Wall Street indices experience a sharp decline, which would push the EUR/USD pair lower.
The EUR/USD pair may stage a short-term upward correction if the market sentiment begins to improve.
EUR/USD Technical Analysis
At 1.0250, the EUR/USD is trading close to the Fibonacci 23.6% retracement of the most recent rally. In the near future, this level is probably going to serve as a turning point.
1.0300 (psychological level, 20-period Simple Moving Average (SMA) on the four-hour chart) lines up as the next resistance before 1.0360 (static level) and 1.0420 in the event that 1.0250 is confirmed as support (end-point of the uptrend).
If EUR/USD falls below 1.0250, sellers may start to act, pushing the price down into psychological levels 1.0200 and 1.0150 (the Fibonacci 38.2% retracement).
The Relative Strength Index (RSI) indicator, which confirms the negative bias, is currently hovering around 40.
