Eurusd On A Recovery Path

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Eurusd On A Recovery Path

EUR/USD On A Recovery Path Around 1.0500

The EUR/USD is trading near the 1.0500 level after a recovery that started from the 1.0488 (8-month lows). Although the pair is only a few pips up, it still signifies a little hope for the bulls. For the most part, the Dollar (USD) appears to be consolidating its gain ahead of important economic metrics such as German inflation.

A closer look at the Euro/Dollar pair tells us that the 1.0488 (low) was only last seen during March. On a year-to-date (2023) basis, that level was also only 5 pips higher as well.

EUR/USD In Oversold Territory Near 1.0488

For now, the EUR/USD is very close to the 1.0500 with a mostly bearish bias. The EUR/USD daily chart shows that the RSI has already crossed the 30 level, which suggests oversold territory.

After all, it makes sense to think that the EUR/USD will consolidate higher after experiencing 7 days of consistent selling. Despite all of this, the bearish risk in the EUR/USD is still very much real and requires caution.

The 4-hour chart of EUR/USD also reveals that a rebound is in the process as the pair ended up touching the bottom of its downward channel. So, even if the bearish trend stays in place, a little bit of consolidation or correction is highly likely.

But if the pair resumes the bearish trend once again and breaks the 1.0480 support, it will lead the Euro/Dollar pair to the 1.0455 support level. On the topside, the nearest resistance to look out for is the 1.0550.

On the fundamental side, there's very little action as the ECB member's comments also had very little effect on the EUR/USD. For now, the ECB remains dependent on data to carve out the next move in its policy.

For now, the dominant theme is that of Dollar Strength, which is making the Euro & other currencies turn down. But in the next few weeks, that might change if the ECB also adopts a more hawkish approach.

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