Eurusd Drops To 10950 After Usd Strength

 Eurusd Drops To 10950 After Usd Strength

EUR/USD Drops To 1.0950 After USD Strength

During Thursday's trading session, bearish pressure overpowered the EUR/USD bulls and pushed the pair toward 1.0950. The recent decline in the EUR and strength in the USD comes after Powell's comments in Congress.

According to Powell's statement, an end to the rate hike policy is far from over, as she supported an additional 50 bps rate hike in two instalments. These comments were supportive of the USD, but more rate hikes will not be such good news for the US economy and the US markets.

EUR/USD: Long-Term Trend Remains Bullish

Despite the strong rebound in the USD, the long-term trend of the EUR/USD remains bullish. In addition, the momentum indicator on the EUR/USD daily chart shows strong bullish presence.

The RSI indicator, which is a measure of the trend strength, is also hovering near the overbought area on the daily chart. But the key thing to note is that there are no signs of any exhaustion, which warrants more EUR/USD upside.

At the same time, the important moving averages are also pointing towards more upside in the EUR/USD. For starters, the 20 SMA is above the 100 SMA, which is a sign of a bullish crossover.

In the short term, there's no doubt that EUR/USD is overbought, but there are still no signs of any change in the direction. If we switch to the 4-hr chart, the technical indicators are also printing extreme values with dynamic support provided by the 20 SMA near 1.0945.

Based on these technical signals, we can conclude that solid support is present near 1.0945 and 1.0890, followed by 1.0850. On the flip side, the nearest resistance level is 1.1020, followed by 1.1060 and 1.1100.

For now, it appears that the door for more rate hikes is open despite what the market gurus were saying about an end to the current policy. But despite such a strong signal, it appears that the USD bulls are still showing signs of hesitation which is a major reason why the EUR/USD is still at its current levels.

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