Aka Ekene, PBA Journalism Mentee
On April 21, 2023, the EUR/USD currency pair displayed topsy-turvy moves around 1.0960 in the early European session. The major currency pair failed to show any decisive move due to the lackluster performance by the US Dollar Index (DXY). However, investors should be prepared for a power-pack action ahead of the release of the preliminary S&P PMI data.
Additionally, S&P500 futures turned negative after headlines from a leaked US Intelligence report that China is building sophisticated cyber weapons. The report claims that China intends to “seize control” of enemy satellites, rendering them useless for data signals or surveillance during wartime, as reported by Financial Times. This development could further impact the risk appetite of the market participants.
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Symmetrical Triangle Pattern and Moving Average Analysis
The EUR/USD pair is auctioning in a Symmetrical Triangle chart pattern near the edge of the upward-sloping trendline plotted from March 24 low at 1.0714. A Symmetrical Triangle formation indicates a sheer contraction in volatility, which is followed by a breakdown in the same.
For the time being, the 21-period Exponential Moving Average (EMA) at 1.0960 is providing a cushion to the Euro bulls. The Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, indicating a consolidation ahead.
Potential Breakout Levels
In terms of potential breakout levels, a break above the psychological resistance of 1.1000 will drive the asset to a fresh annual high at 1.1068, followed by the round-level resistance at 1.1100. On the flip side, a downside move below April 12 low at 1.0915 will drag the asset toward April 10 low at 1.0837 and April 03 low at 1.0788.
Overview and Trends
As of April 21, the last price for EUR/USD was 1.096, exhibiting a daily change of -0.0010 and a daily change percentage of -0.09. The daily open was 1.097.
The daily SMA20, SMA50, SMA100, and SMA200 for EUR/USD were 1.091, 1.0761, 1.0732, and 1.0389, respectively.
Previous daily high and low levels for the currency pair were 1.099 and 1.0934, respectively. Previous weekly high and low levels were 1.1076 and 1.0837, respectively, while previous monthly high and low levels were 1.093 and 1.0516, respectively.
Daily Fibonacci 38.2% and 61.8% levels were 1.0968 and 1.0955, respectively. Daily Pivot Point S1, S2, and S3 were 1.0939, 1.0908, and 1.0883, respectively, while Daily Pivot Point R1, R2, and R3 were 1.0995, 1.1021, and 1.1052, respectively.
In conclusion, the EUR/USD pair is exhibiting a topsy-turvy movement near the edge of the upward-sloping trendline plotted from March 24 low. The Symmetrical Triangle formation suggests a sheer contraction in volatility that could lead to a breakdown. Meanwhile, S&P500 futures turned negative after headlines of China’s sophisticated cyber weapons, which may further affect the market’s risk appetite. Investors should be prepared for significant actions ahead of the preliminary S&P PMI data release. The 21-period Exponential Moving Average is providing a cushion to the Euro bulls, while the Relative Strength Index indicates a consolidation ahead. Traders should monitor the psychological resistance level of 1.1000 for a possible bullish move, and the downside move below April 12 low at 1.0915 could drag the asset towards April 10 and April 03 lows.
