Eurusd Trades On Risk Aversion

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Eurusd Trades On Risk Aversion

Eur/Usd Trades Below 1.0900 On Risk Aversion

EUR/USD has slipped below the 1.0900 handle and is now trading below it amid the risk aversion theme. The pair has continued its descent from 3-month highs amid a recovery drive seen in the US Dollar.

The US Dollar appears to be benefiting from the current environment and is now recovering some of the losses post the ISM PMI data. Up ahead, the US jobs data and the Fed meeting are in focus which will give fresh impetus to the EUR/USD.

Rsi Shows Loss Of Momentum

The technical chart shows that the EUR/USD is currently trading in the lower half of the bullish trading channel. In addition, the RSI on the h4 chart shows that it has dipped below 60 after hitting a high of 70.

The overall technical reading of EUR/USD shows that the pair has lost its bullish momentum and is now trading in a neutral to bearish tone.

On the way down, the first support is at 1.0840, where the 100 SMA is located, and is also the lower limit of the trading channel. Next up is the 1.0800 followed by the 1.0780 where the 200 SMA is acting as dynamic support.

On the way up, the first resistance is present at 1.0900, followed by 1.0950, where the upper limit of the trading channel is present.

It looks like the 1.0900 was the near-term high for the EUR/USD, as it has retreated lower from it since then. Next up is the NFP report and the JOLTS job openings data that could provide fresh impetus to the EUR/USD.

The recent ISM manufacturing PMI showed a change from 49.2 to around 48.7 in May 2024. This is a sign that the manufacturing sector is still in the contraction phase. In fact, the speed of contraction has intensified, which doesn't bode well for the US economy.

Amidst all of this, there is now a 60% chance that the Federal Reserve will cut rates to support the economy, according to FedWatch tool.

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