Technical Analysis: EURUSD

EURUSD rose and then decreased

On Tuesday, EURUSD rose and then decreased. It finally declined by 0.11% and closed to 1.0328. Economic recession in the Eurozone cast shadow on the market, putting pressure on EURUSD.

Lagarde said the Eurozone would continue raising the interest rate

The ECB governor Lagarde said economic growth in the Eurozone was hit as financial conditions were tightened, global demand declined and economic prospect was uncertain. It is expected that Eurozone economy will be worse in the rest of this year and next year. However, the interest rate will be raised because Eurozone inflation reached a record high and economic activity slowed down.

Eurozone economic data was weak

According to Federal Statistical Office of Germany, German CPI, m/m (November) hit -0.5%, the lowest since November 2020. In addition, based on the data released by the Eurostat, Eurozone Industrial Climate Index reached -2, the lowest since January 2021.

Technically speaking, it is overwhelmingly likely that EURUSD will undergo correction

On the chart of the day, EURUSD continued falling. Potential double tops pattern occurred in the short term. In terms of technical indicators, KDJ went downwards after death cross occurred, showing that EURUSD will fall further. In addition, EURUSD will start declining further if it breaks below the support at 1.022.

On the 4-hour chart, EURUSD decreased and was prone to fluctuation. The market trend is bearish. In terms of technical indicators, MACD went downwards after death cross occurred, showing that the market trend is bearish. EURUSD will continue dipping if it is capped at the resistance at 1.040.

Key resistance: 1.040, 1.050

Key support: 1.022, 1.010

In summary, EURUSD may fall further as there is risk that the economic recession will occur in the Eurozone. Investors should focus on Eurozone CPI, y/y (November) during the day.