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EUR/USD Recovery Won’t Be Easy, Gold Dives

Aayush Jindal

Aayush Jindal

Market Analysis

Key Highlights

  • EUR/USD traded sharply lower below the 1.0250 support.
  • A key bearish trend line is forming with resistance near 1.0280 on the 4-hours chart.
  • GBP/USD found support near 1.1880 and recovered above 1.2000.
  • Gold price declined below the $1,750 support zone.

 

EUR/USD Technical Analysis

The Euro started a major decline from the 1.0620 zone against the US Dollar. EUR/USD declined heavily below the 1.0420 support to move into a bearish zone.

Looking at the 4-hours chart, the pair gained pace below the 1.0350 level, the 100 simple moving average (red, 4-hours). It is also well above the 200 simple moving average (green, 4-hours).

The bears even pushed the pair below the 1.0250 support zone. A low was formed near 1.0071 and the pair started a minor upside correction. It tested the 23.6% Fib retracement level of the downward move from the 1.0614 swing high to 1.0071 low.

On the upside, the pair is facing resistance near the 1.0250 zone. There is also a key bearish trend line forming with resistance near 1.0280 on the same chart.

A clear move above the trend line might call for a test of the 50% Fib retracement level of the downward move from the 1.0614 swing high to 1.0071 low at 1.0345. Any more gains may perhaps open the doors for a move towards the 1.0450 resistance.

If there is no recovery wave above the 1.0250 resistance, the pair might resume its decline. The main support sits near the 1.0050 level. A downside break below the 1.0050 support could send the pair further lower.

Looking at GBP/USD, the pair traded as low as 1.1875 and recently started an upside correction above the 1.1950 level.

Economic Releases

  • UK BRC Like-for-Like Retail Sales for June 2022 (YoY) - Forecast -1.2%, versus -1.5% previous.