EURUSD pair continues to form a downtrend

24 May 2023 217
EURUSD pair continues to form a downtrend

The EURUSD currency pair declined yesterday due to the publication of the European PMI data which was weaker than expected.

 

ECB President Christine Lagarde gave the opening speech on Tuesday at an event celebrating the central bank's 25th anniversary. Recently, she recommended her colleagues to be cautious in the fight against inflation, and this opinion was supported by the president of the Bundesbank and the head of Deutsche Bank.

 

Today at 17:00 GMT, the minutes of the U.S. Federal Open Market Committee meeting will be published. Investors will be carefully studying the minutes of the meeting held this month. It is interesting how many meeting participants supported the decision to soften the recommendations for future interest rate hikes. Market participants want to get information about the chances of a rate hike in June.

 

The situation with the U.S. debt ceiling remains more interesting. U.S. President Joe Biden and House Speaker Kevin McCarthy could not reach agreement about raising the government's $31.4 trillion debt ceiling on Monday. A little more than a week is left before a possible default, which could lead to the collapse of the U.S. economy. Officials promised to continue negotiations. 

 

U.S. Treasury Secretary Janet Yellen announced a sharp warning. Yellen said that there is a high probability that her department will run out of funds in early June.

 

Considering the remaining week before a possible historic U.S. government default, which could cause significant financial market turbulence, the dollar, which usually serves as a safe haven in stressful periods, has become the object of some demand.

 

EURUSD pair continues to form a downtrend on the H1 timeframe. The price found support at 1.0760, rebounded from it and now is trending to resistance. In addition, the price formed a linear resistance at 1.0830, which confirms its significance for six days.

 

As long as the price is in a downtrend, it is advisable to consider a sell trade.

 

Signal:

The short-term prospects for the EURUSD pair are to sell around the level of 1.0845

The target is at the level of 1,0760.

Part of the profit should be fixed near the level of 1,0785.

The stop-loss is at the level of 1,0840.

 

"Bearish" trend has a short-term character, so the volume of trade should not exceed 2% of your balance.

This content is for informational purposes only and is not intended to be investing advice.

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