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MTrading Team • 2024-05-01

EURUSD drops toward key support line near 1.0600 on Fed Day

EURUSD drops toward key support line near 1.0600 on Fed Day

EURUSD remains pressured at the lowest level in a week, extending the late April’s retreat from 20-SMA and a six-month-old support-turned-resistance, as traders await the US Federal Reserve (Fed) monetary policy announcements. The Euro pair’s weakness also takes clues from an impending bear cross on the MACD and an absence of oversold RSI conditions. With this, the quote is likely to extend the latest fall toward an ascending support line stretched from early October 2023, close to 1.0610 at the latest. Following that, the yearly low marked in April around 1.0600 and multiple lows registered during late 2023 near 1.0520 and 1.0490 will test the bears before directing them toward the previous yearly low of 1.0448.

Alternatively, the US Fed’s inability to inspire the EURUSD bulls, mainly amid the high hopes, could trigger a quick recovery in the pair prices toward the 20-SMA hurdle of 1.0710. However, the quote’s further upside needs validation from the previous support line stretched from early November 2023 surrounding 1.0740. It should be noted that a convergence of the 200-SMA and 50-SMA, near the 1.0800 threshold at the latest, appears a tough nut to crack for the buyers, a clear break of which will enable them to confront the final defense of the sellers, namely a downward-sloping resistance line from December 2023, near 1.0865 as we write.

To sum up, the EURUSD is on the way to testing the key support line as market players await the FOMC verdict. However, high hopes from the US central bank and a limited downside room for the pair suggest hardships for the sellers past 1.0600.

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