EUR/USD Forecast Today: The pair has a big chance

EUR/USD Forecast Today: The pair has a big chance
EUR/USD Forecast Today: The pair has a big chance

In the case of a downward trend

  • Trade SELL EURUSD and set take profit order at 1.0740.
  • Set your stop loss at 1.0900.
  • Schedule: one day.

    To create an Islamic forex account

In the upward trend

  • Set Buy Stop at 1.0875 and Take Profit at 1.0950.
  • Set your stop loss at 1.0800.

The EURUSD continued to slide lower on hopes that the US will reach a debt limit agreement. The pair fell as the US Dollar Index (DXY) jumped 30 basis points to $102.70. The pair fell to as low as 1.0810, the lowest level since April 3rd.

The market has faced three major risks recently. One of these risks is the issue of the debt limit, which threatens to see the US economy in a state of default. House Speaker Kevin McCarthy said in a statement that he was optimistic the country would not default. Joe Biden repeated the same thing before his visit to Japan.

The other danger was in the banking sector. There are signs that the banking sector is stabilizing after most of the regional bank stocks jumped. Western Alliance shares jumped 13% while BacWest shares rose more than 21%. SPDR Regional Bank’s ETF is up more than 7%.

Another risk is the possibility of a recession in the United States. Recent data shows that the US economy is growing at a slower pace. Figures published on Wednesday showed that building permits in the country fell in April.

The EURUSD also interacted with the latest European inflation data. Figures released by Eurostat showed that the core consumer price index jumped to 7.0% while core inflation eased slightly to 5.6%.

Therefore, there is a possibility that the ECB will continue to raise interest rates in the coming months. On the other hand, the Fed is expected to maintain its rates and continue its quantitative tightening (QT) policy.

The EURUSD will react to the statement of Christine Lagarde, President of the European Central Bank. In the US, the main numbers to watch will be the Philadelphia Fed Manufacturing Index and the Preliminary Jobless Claims numbers.

The EUR/USD exchange rate continued to decline as the US Dollar Index rebounded again. Move below 38.2% Fibonacci retracement point. The pair moved below the 50-period moving average. It has fallen below the Ichimoku Cloud.

It also moved below the lower side of the Bollinger Bands while the Relative Strength Index (RSI) continued to decline. Therefore, the pair is likely to continue falling, with the next major support to watch at 1.0743.