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EUR/USD At Risk of More Downsides, Dollar Extends Increase

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Aayush Jindal

Key Highlights

  • EUR/USD could accelerate lower if it breaks the 0.9900 support.
  • A major bearish trend line is forming with resistance near 0.9990 on the 4-hours chart.
  • GBP/USD remains in a bearish zone below the 1.1550 support.
  • The Euro Zone Services PMI could remain stable at 50.2 in August 2022.

EUR/USD Technical Analysis

The Euro started a major decline from well above 1.0100 against the US Dollar. EUR/USD settled below the parity level to move into a bearish zone.

Looking at the 4-hours chart, the pair is showing bearish signs below the 1.0000 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

This past week, there was a minor upside correction from the 0.9900 support zone. The bulls were able to push the pair above the 0.9950 and 0.9980 resistance levels. The pair even climbed above the 1.0000 level, but it stayed below the 100 simple moving average (red, 4-hours).

A swing high was formed near 1.0079 and the pair started a fresh decline. It traded below the 1.0000 and 0.9950 support levels. There is also a major bearish trend line forming with resistance near 0.9990 on the same chart.

EUR/USD is now trading near the 0.9900 support zone. A downside break below the 0.9900 support might send the pair towards the 0.9850 support. The next major support is near the 0.9820 level. Any more losses might call for a move towards 0.9780.

On the upside, the pair is facing resistance near the 0.9980 level. The next major resistance is near the 1.0000 level, above which the pair might rise towards the 1.0080 level.

Looking at GBP/USD, the pair gained bearish momentum below the 1.1550 level and is showing bearish signs below the 1.1500 level.

Economic Releases

  • Germany’s Services PMI for August 2022 - Forecast 48.2, versus 48.2 previous.
  • Euro Zone Services PMI for August 2022 – Forecast 50.2, versus 50.2 previous.
  • UK Services PMI for August 2022 – Forecast 52.5, versus 52.5 previous.
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