Market Analysis – May 7
EURUSD has undergone a sluggish ascent since mid-April, defying the prevailing bearish undertone on the daily timeframe. Despite this, the price has surged into the premium zone of the bearish swing, signaling a potential impending bearish displacement as sellers eye the opportunity presented by the elevated price levels.
EURUSD Key Levels
Demand Levels: 1.0650, 1.0600, 1.0520
Supply Levels: 1.0890, 1.0960, 1.1030
EURUSD’s significant highs and lows have been interconnected with trendlines, delineating a bearish channel on the daily timeframe. The market continues to exhibit a bearish bias, with the swing high of 1.0890 remaining unbreached. Additionally, the current price remains below the long-term Moving Averages of periods 100 and 128.
The gradual ascent observed appears to signify a retracement following the impulsive surge to 1.1060. The breach of the Moving Average period 30 underscores the short-term upward trajectory of the price.
Market Expectations
The price has now entered a premium zone conducive to a potential market selloff. Anticipation mounts as the resistance trendline of the channel is tested, expected to intensify selling pressure. Notably, both the Stochastic indicator on the daily timeframe and the four-hour timeframe indicate an overbought condition. As such, the prevailing sentiment suggests an impending reversal to resume the bearish trend. The swing low of 1.0650 emerges as a plausible target for short positions.
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