EUR/USD Price Analysis: Inventory distribution stretches ahead of Fed policy

The formation of inventory distribution involves the initiation of longs by the market participants.
Overlapping of 20- and 50 EMAs to the price dictates a consolidation ahead.
A volatility expansion after a squeeze will result in volumes and wide-range ticks.

Sagar Dua FXStreet

The EUR/USD pair is looking for a cushion around 1.0180 after a steep correction in the early Tokyo session. On Friday, the asset witnessed a steep fall after sensing exhaustion while sustaining above 1.0250, which dragged the major swiftly.

An inventory distribution formation after a juggernaut rally has stretched further on an hourly scale. This generally indicates the unavailability of a potential trigger, which can deliver a firmer move, most probably on the upside. The inventory distribution has formed in a range of 1.0131-1.0282 range.

It is worth noting that the 20- and 50-period Exponential Moving Averages (EMAs) around 1.0200 are overlapping with the asset price, which signals a consolidation ahead.

Also, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which signals a volatility contraction but is followed by a breakout in the same.

A breach of Thursday’s high at 1.0278 will drive the asset towards the round-level resistance at 1.0300, followed by July 1 low at 1.0366.

Alternatively, the greenback bulls could gain control if the asset drops below Monday’s low at 1.0081. An occurrence of the same will drag the asset towards the psychological support at 1.0000. A breach of the psychological support will expose the greenback bulls to recapture its two-year low at 0.9952.

EUR/USD hourly chart

EUR/USD

Overview
Today last price	1.0188
Today Daily Change	-0.0027
Today Daily Change %	-0.26
Today daily open	1.0215

Trends
Daily SMA20	1.0246
Daily SMA50	1.046
Daily SMA100	1.0641
Daily SMA200	1.1

Levels
Previous Daily High	1.0255
Previous Daily Low	1.013
Previous Weekly High	1.0278
Previous Weekly Low	1.0078
Previous Monthly High	1.0774
Previous Monthly Low	1.0359
Daily Fibonacci 38.2%	1.0178
Daily Fibonacci 61.8%	1.0207
Daily Pivot Point S1	1.0145
Daily Pivot Point S2	1.0075
Daily Pivot Point S3	1.0019
Daily Pivot Point R1	1.027
Daily Pivot Point R2	1.0325
Daily Pivot Point R3	1.0396

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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