EUR/USD – The Strong Dollar Makes the Pair Price Drop to an All Month-low.
Take Profit: 1.0486
Stop Loss: 1.0615
Timeline: 1-2 days
Buy stop: 1.0570
Take Profit: 1.0700
Stop Loss: 1.0500
The DXY was seen rising to its peak point in the last 2 months as an after effect of the American inflation numbers. The EUR/USD pair price dropped to 1.0545, which was also the lowest level since 6th January. The price has fallen more than 4% from its highest level in the month of Feb. On a fundamental level, inflation is tightening its grip on the Eurozone as economists think that the ECB could introduce more rate hikes to tackle the high level of core inflation prevailing in the economy.
The data released from the US also points at the high inflation as they are still away from their target rate of 2%. Many analysts are questioning if the Fed will be able to get to their target anytime soon. This week will be quite volatile for the pair with key data releases concerning both economies.
For technical analysts, the pair was seen forming a bearish trend on charts following the inflation data release. The pair also moved below the 25-day and 50-day MAs. The RSI has moved beneath the oversold level. Along with the price falling to the lowest point since 6th Jan, at 1.0542, the pair also fell below the key support at 1.0616. The pair price is expected to keep falling further and the overall outlook is still very bearish.