Ichimoku analysis (4-hour chart)
Tenken-Sen- 1.05698
Kijun-Sen- 1.06137
EURUSD lost its shine on the strong US dollar. It hit a low of 1.05325 at the time of writing and is currently trading around 1.05325.
The pair declined as risk aversion increased due to geopolitical tension in the Middle East.. Markets eye ECB monetary policy and any dovish comments by ECB President Lagarde will push the pair further down to 1.0480.
According to the CME Fed watch tool, the probability of a no-rate hike in Nov increased to 93.40% from 98.80% a week ago.
The US 10-year yield recovered after upbeat US home sales data. The US 10 and 2-year spread narrowed to -14.60% from -75%.
The pair trades above short-term 21 EMA, 55 EMA, and below long-term (200-EMA) in the 4-hour chart. Any break below 1.04800 confirms further bearishness. A decline to 1.0440/1.0380 is possible. The near-term resistance is around 1.0565, and any breach above targets 1.0600/1.0660/1.0700. Bullish invalidation only if it breaks below 1.0440.
Indicator (4-hour chart)
CCI – bearish
Directional movement index – Neutral
It is good to sell on rallies around 1.0565-68 with SL around 1.0620 for a TP of 1.04850.
