Technical Analysis

EUR/USD Price Analysis – May 24, 2023

By LonghornFX Technical Analysis
May 24, 20232 min

Daily Price Outlook

In the early European session, the EUR/USD pair has extended its recovery above the key resistance level of 1.0780, supported by a weakening US Dollar Index (DXY) trading below 103.50. The pair initially bounced back after testing levels near 1.0760, as the USD Index faced significant resistance in its upward recovery above last week’s high at 103.62.

S&P500 futures have maintained their gains from the Asian session and edged higher during early London trading, indicating a slight improvement in risk sentiment among market participants. However, US indices experienced a sharp decline on Tuesday as investors reduced their holdings in technology equities.

Investors remain concerned about the US debt-ceiling issues and the delayed response from US President Joe Biden, which has raised fears of a potential government default.

In the EUR/USD pair, the focus today is on the speeches by ECB President Lagarde, upcoming economic data releases, and developments related to the US debt ceiling.

After a significant pullback on Tuesday, the EUR/USD pair has resumed its upward movement and aims to surpass the recent monthly lows around 1.0760 on Wednesday. Additionally, the release of the FOMC Minutes from the May meeting will be followed by the weekly MBA Mortgage Applications report, which are typically released in the US.

EUR/USD Price Chart – Source: Tradingview

EUR/USD – Technical Outlook

From a technical perspective, the EUR/USD has formed a descending triangle pattern on the four-hour timeframe, indicating a potential support level around 1.076. A breakthrough below this support level could initiate a bearish move for the currency pair.

Alternatively, if the EUR/USD successfully surpasses the 1.0800 level, it may aim for resistance levels at 1.0825 or 1.0860. Conversely, breaching the 1.0760 support level could lead to a target around 1.0720.

Today’s strategy involves closely monitoring the 1.076 level. A break below this level could trigger selling pressure, while maintaining above it suggests the possibility of further upside potential for the EUR/USD pair.



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