EUR/USD digs deep as markets anticipate fresh volatility

EUR/USD trades below 1.18500 as volatility returns to market.
Focus shifts to Fed minutes, Unemployment claims.
Support seen at 1.1823 and 1.1810.

Erastus Adegbotolu TradingPRO

The Euro has continued to weaken against the US dollar as the markets looks to pick after a quiet start to the week due to the President’s day holiday in the US. As of writing, the EURUSD has dropped about -0.16% during the London session with the price now below 1.18500 handle.

On the economic front, rate cut sentiments still dominates the headlines after the latest US CPI report came out lower than expected, supporting claims that the Fed’s could consider adjusting its policy in the near term. The coming days will see a raft of data report that will spur market volatility. The Fed minutes on Wednesday will re-echo the Central Bank’s position on its monetary policy path and also interpret the current inflation trends with a possible clue on the timing of its rate adjustment. This will be followed by the unemployment claims data will bring fresh insight on labor market conditions with the numbers expected to improve from the previous week.

Technical Outlook

The EUR/USD continues to entertain sellers after hitting a key level around 1.1200 but still maintains a healthy bullish structure. After much consolidation on Monday, the price has now edged lower with a possible move towards 1.1810.

A near-term support around 1.1823 could offer a lifeline from further decline but buyers will have to be wary of a descending trendline that sustained price pressure from the previous week. Failure to break above the trendline could see the price revisit the 1.1823 support and should we see a break, then we could see the price drfit towards 1.1810.

On the flip-side, a price break above the trendline could be an invitation for longs with near-term resistance areas around 1.18700 and 1.1887.

Author

Erastus Adegbotolu

TradingPRO

Forex market analyst and educator with a strong focus on technical analysis and trader psychology.

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