EUR/USD June Open Range Vulnerable As ECB Sticks To Higher PEPP

With that said, it remains to be seen if the decline from the January high (1.2350) will turn out to be a correction in the broader trend rather than a change in EUR/USD behavior as the crowding behavior from 2020 resurfaces, but the exchange rate may threaten the opening range for June as it struggles to retain the rebound from the monthly low (1.2104).


Image of EUR/USD rate daily chart

Source: Trading View

  • Keep in mind, EUR/USD established a descending channel following the failed attempt to test the April 2018 high (1.2414), but the decline from the January high (1.2350) may turn out to be a correction in the broader trend rather than a change in market behavior as the exchange rate trades back above the 50-Day SMA (1.2088) to break out of the bearish trend.
  • The Relative Strength Index (RSI) showed a similar dynamic as the oscillator reversed ahead of oversold territory to break out of a downward trend, but the string of failed attempts to push above 70 suggests the bullish momentum will continue to abate as the indicator reverses ahead of overbought territory.
  • As a result, EUR/USD may threaten the opening range for June, with a break of the monthly low (1.2104) opening up the 1.2080 (78.6% retracement) region, which largely lines up with the 50-Day SMA (1.2088).
  • Next area of interest comes in around 1.2010 (100% expansion), with a break of the May low (1.1986) bringing the Fibonacci overlap around 1.1920 (78.6% expansion) to 1.1970 (23.6% expansion) on the radar.
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