EURUSD Faces Downward Pressure Amid Strong US Data

EURUSD Faces Downward Pressure Amid Strong US Data
EURUSD, one of the most traded currency pairs, has witnessed a noteworthy downward shift today, and the reason for this movement lies primarily in the day's economic calendar.

The European Central Bank (ECB) initiated the sequence by hiking its interest rates by 25 basis points, setting the main refinancing rate at 4.25%. However, the spotlight swiftly turned to the US, as robust GDP data emerged, showcasing a growth of 2.4% quarterly instead of the projected 1.8%. Coupled with surprisingly robust durable goods orders, which registered at 4.7% against an expectation of just 1.3%, the US dollar found solid grounds for appreciation.

From a technical perspective, the daily chart of EURUSD reveals a correction equality pattern (highlighted in green). After touching the apex of this pattern and the 61.8% Fibonacci level, it became evident that this represents a critical resistance level for the currency pair. Previously, there were attempts to bounce off the 1.105 support (marked in yellow). However, today's reversal has not only pierced this support but has also set a pronounced sell signal in motion.

Looking ahead, our attention is directed towards the dynamic support (depicted in purple) that has been underpinning the uptrend since September 2022. A breach of this support, along with the 50% Fibonacci retracement, will reaffirm the bearish sentiment, making the red line (associated with the developing triple top pattern) the next plausible target.

In conclusion, as long as EURUSD remains subjugated by the yellow zone, the bias skews towards the bearish end. This bearish perspective will only be overturned if the pair manages to scale above the 61.8% Fibonacci level. Given the current market dynamics, however, such an outcome appears to be on the less probable side of the spectrum.

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