The EURUSD currency pair rose by 3.01% (3338 pips) from 1.10840 to 1.14178 from May 13 to May 26. By today, May 28, the pair has lost 33.85% of this gain, down 0.99%, and is trading at 1.13050 in the 1.12000-1.14200 channel at the time of writing.
On the daily timeframe, the Moving Average Convergence/Divergence indicator (MACD) is above the zero level, signaling a new strengthening of the EURUSD buying momentum after its long and strong weakening. The 4-hour MACD is also above the zero line, showing an easing of the buying momentum and a potential move to selling in the short term.
The Relative Strength Index (RSI) on the daily timeframe has risen from the bearish zone, standing at 50 and holding near this value for a week. So, its influence on determining the further movement of the currency pair is now limited. The four-hour RSI is 39 and has been systematically descending to this value from the boundary of the overbought zone since the morning of May 27. Previously, the indicator was in the bullish zone. This signals the transition to the downward trend of the EURUSD quotes in the short term.
The currency pair is trading below the level of 1.14 for the second day in a row, which is due to the recovery of the US dollar after the positive report on consumer sentiment for May. The report triggered the decline in the pair's quotes. The US Dollar Index, which tracks the value of the country’s currency against 6 major counterparts, rose more than 0.62% to 99.77.
Weak data on inflation in France with a decrease in the consumer price index from 0.9% to 0.6% undermined the strength of the single European currency. Moreover, it opened the door for further easing of monetary policy by the European Central Bank.
Trading strategy option: sell at the current price with a Take Profit at 1,12300 and a Stop Loss at 1,13800.
This content is for informational purposes only and is not intended to be investing advice.
