EUR/USD – A Bearish Breakout is Possible for the Pair

Bearish View

Take Profit: 1.0717
Stop Loss: 1.0925
Timeline: 1-2 days

Bullish View

Buy Stop: 1.0880
Take Profit: 1.0950
Stop Loss: 1.0765

The pair was having a sell-off from Friday which is being sustained with the drop to 1.0850, which is ~0.80% below the peak price recorded in March and also the lowest price since Thursday. Apparently the price rise in March can be attributed to the banking crisis and rate hikes by the ECB. ECB is one step ahead of Fed with its hawkish tone as an attempt to curb the elevated inflation. We need to look forward to the data releases from S&P Global for both US and EU as the manufacturing and service PMI figures could have an impact on the pair price. However, the impact will be minor as we already got the estimates for the same last month itself. The US NFP data release would be another event to watch out for this week.

On the charts, we saw the pair making a major recovery in the month of March. Previously it had fallen to the multi-month low of 1.0523 but managed to climb up touching 1.0928, hitting the highest price level since 23rd Feb. On 4H charts, the pair moved up to 78.6% Fibonacci Retracement level at first but it was followed by a pull back to 61.8% retracement point. The pair also formed a double-top pattern at ~1.0921, with its neckline touching 1.0717. The RSI has moved a little below the neutral point and the pair is hovering below the strong pivot and reverse point of the Murrey Math Lines. The double-top pattern is clearly hinting towards the bearish breakout which is the most possible scenario for the pair as of now.

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