The EUR/USD pair has refreshed its intraday decline as bearish traders begin to attack 1.0500. They went for the threshold as they returned to the market following an absence of two days.
That said, the currency pair has given justification for the decline that occurred the previous day. It was a break of the symmetrical triangle in the course of the Asian session on Wednesday.
Bears are Increasing Control as It Stands
Furthermore, after the triangle collapsed, an impending bear cross on the moving average convergence divergence favored sellers. The decisive turnaround in the 200-period simple moving average equally favored the pair’s sellers.
Nevertheless, a week-old ascending trend line close to 1.0490 is posing a challenge to the EUR/USD pair. This situation is, however, at the time of putting this piece together.
After that, the monthly low point of 1.0359 might probe sellers before it directs them to the 1.0200 peaks of July 2002. The same is expected of the annual low point of 1.0350
As an alternative, recovery will be elusive till the quote gets under the 200-period simple moving average of 1.0590. Another factor acting as an increasing filter swing high on the 10th of June close to 1.0645.
EUR/USD price chart. Source TradingView
Note that the mentioned triangle’s support line recorded at 1.0555 might give more upside filters in the course of the EUR/USD recovery. The top recorded the previous week at 1.0600 might also do the same.
Above all, bears are reclaiming their hold on the currency pair while traders get ready for Jerome Powell’s testimonial. Meanwhile, the bears are still holding lower after they refreshed the daily low close to 1.0500.
While waiting for statements from the Fed Chair, traders are also expecting statements from the ECB policymakers. They justify the risk aversion moves in the early Wednesday trade in Europe.
The pair’s most recent weakness might be connected with the general rebound in the US Dollar. This happens ahead of Jerome Powell’s bi-annual testimony on Monetary Policy Reports. Another factor that still puts pressure on the pair is the concern about slow economic movements.
Fears of Global Inflation Heightens
Aggressive monetary policies from leading central banks are stoking fears of a global slowdown. The US Dollar index picked up the pace and refreshed its intraday height close to 104.65. the index rose for the first time in three days.
Housing sales in the US dropped to the lowest point in about two years on an annual basis. Chicago’s Federal National Activity also dropped to 0.01 in the month of May against the initial 0.04.
It should be noted that hawkish statements from the ECB’s governing council member, Olli Rehn, favored the EUR/USD pair. Rehn said to Reuters that September’s rate increase might be higher than 25 basis points. The statement increased doubt about the ECB’s suggestion of a 25 bps increase in July and September.
More ECB policymakers will be speaking on Wednesday. It could trigger a massive recovery in the price of the EUR/USD pair.