On the daily chart below, we can see that the downtrend remains strong in the EURUSD pair. The multiple failures to break the 1.1033 high, coupled with stronger than expected US data and a hawkish repricing in interest rates expectations, led to a big selloff. The double top at the 1.1033 high may take us all the way back to the 1.0533 support, which is also the neckline of the pattern.

In such a scenario, EUR/USD would erase all the post-SVB collapse rally, which is something we’ve also been seeing across the other markets. The divergence between the two tops with the MACD also strengthens the case for a return back to the 1.0533 level.

EURUSD Technical Analysis

On the 4 hour chart below, we can see how the EURUSD has been trading lower within a falling channel with clear swing highs and swing lows. The price has now reached the first downside target in the form of the bottom of the previous divergent rising channel. We should see a bounce on this level as the price has been diverging with the MACD MACD Moving Average Convergence/Divergence (MACD) is a technical analysis indicator used for trading financial instruments, such as stocks, commodities, and foreign exchange.Created by Gerald Appel in the 1970’s, its purpose is to provide information to the trader with regards to an instrument’s current movement and potential behavior. Traders typically use the MACD to assist them in making decisions on whether to buy or sell a given asset.At the heart of it, the MACD indicator is essentially a coupl Moving Average Convergence/Divergence (MACD) is a technical analysis indicator used for trading financial instruments, such as stocks, commodities, and foreign exchange.Created by Gerald Appel in the 1970’s, its purpose is to provide information to the trader with regards to an instrument’s current movement and potential behavior. Traders typically use the MACD to assist them in making decisions on whether to buy or sell a given asset.At the heart of it, the MACD indicator is essentially a coupl Read this Term falling right into this support. This should be a signal that the bearish momentum is waning, and we may see a pullback before the next fall.

On the 1 hour chart below, we can see that the price recently bounced from the lower bound of the channel to trade higher into the upper bound of the channel. The 50% Fibonacci retracement level stalled the rally and after a bit of consolidation, EUR USD broke lower, retested the support turned resistance and continued lower.

The buyers should now lean on the 1.0710 support with defined risk just below it and target the 1.0760 resistance. The sellers, on the other hand, will want to see the price to break through the support to target the 1.0533 level, but we should also see them lean on the 1.0760 resistance for a better risk to reward setup.