Analytical Perspective for EUR/USD: Wave Weakness

Market Analytics and Considerations

Key Notes

• The Fifteen-week uptrend in EUR/USD is beginning to wane.
• A small setback could happen.

Technical forecast for the EUR/USD: flat

On Wednesday, the bid tone for the EUR/USD remains constant near 1.0750.

A rise to 1.0800 is revealed by the surpassing of recent peaks around 1.0760.

The euro/dollar is rising for a fourth consecutive sessions as it returns to the 1.0750 area Wednesday.

The rise on weak impetus on Monday may be a hint that the fifteen-week gain in the EUR/USD is beginning to falter.

After falling to a 20-year low of 0.9535 in September, the EUR/USD pair has continued to rise gradually. A bearish convergence (decreasing 14-day Relative Strength Index associated with price surge) on the chart indicates that the rise is waning even if there is no indication that the short-term upswing is about to reverse.

The split occurs when the euro encounters strong resistance near the May 2022 top of 1.0786, which also happens to coincide with a moderately upward-sloping trendline from 2017. This increases the possibility of a modest decline.

Further decline might lead it back to the 1.0482 low from last week, which served as immediate support. Only a break lower than 1.0482 would signal a waning of the bullish pressure, which might continue forward towards the 200-day moving average near 1.0300 zone

In addition, looking at the wider picture, the rise since late 2022 seems to be remedial instead of a turnaround of the declining trajectory. What is unknown, though, is what percentage of the correction—which is currently approximately 38.2percent of total of the fall from 2021—has been retraced. In those other words, maybe it could go beyond the 50percentage retracement (near 1.0940). The hurdle for a move toward 1.0940 might be raised by a breach under 1.0482, which would indicate that the rally may be beginning to show signs of weakness.

Daily SMA

If bulls keep control, the June 2022 top at 1.0773 (June 27) and the May 2022 topping at 1.0786 could both be called into question by the breakout of the January top at 1.0760 (Jan 9). (May 30).

Gains above this point should aim for the important round mark at 1.0800.

While the pair is above the 200-day SMA at 1.0308, additional gains are still anticipated.