GOLDWELL：Daily Market Recap – EURUSD Will the euro continue to fall against the US dollar?

The dollar continues to strengthen against the euro after the U.S. Federal Reserve announced that it would be premature to start raising rates now. In addition, ECB President Christine Lagarde also mentioned a low probability of a rate hike in 2022.

Jerome Powella said that the U.S. labor market could recover sufficiently to reach full employment by mid-2022, a key input for the CENTRAL bank to consider raising interest rates, so MARKETS will be watching the U.S. jobs report (NFP) on Friday, a key indicator as it strongly influences the Fed's monetary policy.

From a technical perspective, the indicators are deteriorating for the euro and the single currency could continue its downward slide in the coming months. First, prices have been in a downtrend since May 2021, characterized by lower and lower highs and lows (concepts given by Charles Dow). Second, the EUR/USD has validated a reversal chartist pattern: a double top.

Thus, the break of the neckline around $1.1710-$1.1750 opens the way for a new wave of selling. Technically, by shifting the height of this figure, the chart analysis suggests a plunge of the euro towards $1.1180. Such a scenario should not be ruled out, as the momentum remains bearish and support levels remain under pressure.

The next technical targets before the theoretical target ($1.1180) are at $1.1460 and then $1.1370. Of course, our strategy will be invalidated if the market manages to regain the $1.1875 in the coming weeks.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.