Technical Analysis of EUR/USD
The Euro started off April with substantial losses that sent the EUR/USD back to the key support level by 1.30. The bulls managed to regain the control since 6th April with the market currently hovering above the 1.308 level, the 23.6% Fibonacci level from August’s high to January’s low. Despite the improved outlook for the US economy that recently prompted the Fed to consider its ultra accommodative monetary policy stance, news that Moody’s is expected to come out with its decision on downgrades for some of the major US banks in May is likely to influence market sentiment in the currency market leaving the door open for additional upside in the EUR/USD. With the RSI moving up upwards after touching the oversold zone on the daily chart, a bounce back towards the 1.32-1.33 area is now likely. The picture remains bullish on the hourly chart with the bullish alignment of the 20 EMA over the 50 EMA in place and the MACD signal line firmly above the zero line for two consecutive sessions. The next key level to watch on the upside is at 1.335, the 38.2% Fibonacci retracement. In the alternative scenario, a break and a close under 1.30 could accelerate declines towards the 1.28 area.
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