By Orbex
The euro continues to weaken over growth concerns in the eurozone amid the war in Ukraine. A tentative break below 1.0500 further put the euro under pressure.
A lack of rebound suggests that the bears are confident enough to hold onto their chips, while the bulls stay on the sidelines. A bullish RSI divergence shows a slowdown in the sell-off.
However, only a rally above 1.0650 could ease the selling pressure and help turn sentiment around. Otherwise, 1.0400 from January 2017 would be the next stop.
Free Reports:
The US dollar rallies ahead of an expected Fed rate hike this week. The pair is grinding a rising trendline and is about to reach a two-year high at 0.9800.
The RSI has ventured into the overbought area on the daily time frame. Meanwhile, the indicator’s bearish divergence suggests a loss of momentum in the parabolic ascent. The pair could be due for a pullback for the bulls to catch their breath.
The demand zone between the trendline and 0.9670 from the latest consolidation is a key area to gauge short-term buying interest.
The Dow Jones 30 recoups losses as traders take profit ahead of the FOMC. A break below 33300 forced bulls to bail out and suggests that the liquidation phase is yet to end.
The demand zone around 32700 from March’s rebound is a critical level to test buyers’ resolve. An oversold RSI has attracted bargain hunters, but the rebound will need to clear 33900 before a bullish reversal could materialize.
Failing that, February’s lows around 32300 would be the support of last resort before a deeper correction towards 31000.
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