EUR/USD Price Analysis – June 23, 2023

Daily Price Outlook

The EUR/USD pair continues to decline for the second consecutive day, extending its retracement slide from a six-week high. The pair is trading within a range of 1.0940-1.1935, down nearly 0.20% on the day.

The US Dollar (USD) has regained strength after reaching its lowest level since May 11. The USD’s rise can be attributed to the hawkish view of Federal Reserve (Fed) Chair Jerome Powell, who supports the argument for more interest rate hikes to address high inflation cautiously.

Powell’s statement during his congressional deposition that the Fed does not anticipate rate cuts in the near future has further supported the US dollar.

This overshadowed the negative US macro data released on Thursday, which showed that Initial Jobless Claims remained at a 20-month high, indicating a deteriorating labor market.

The overall weaker tone in equity markets also contributes to the safe-haven dollar’s strength and adds to the downward pressure on the EUR/USD pair.

Concerns about economic headwinds due to rising borrowing costs and strained US-China relations dampen investor appetite for riskier assets.

The upcoming release of flash PMI prints from the Eurozone and the United States will provide new insights into the global economy’s health and potentially influence the EUR/USD pair’s direction.

However, expectations of further interest rate hikes by the European Central Bank (ECB) may limit strong bearish bets and restrict the downside.

EUR/USD Price Chart – Source: Tradingview

EUR/USD – Technical Analysis

The EUR/USD pair made a failed attempt to break the 1.1000 barriers, resulting in a downward rebound toward the key support level at 1.0940.

Currently, the price is testing this level and aiming to break it, indicating a potential shift to a bearish trend on an intraday basis.

As a result, negative trading activity is expected today, with the main target being the test of the 1.0860 level.

It is important to closely monitor the price action at this level, as it will play a significant role in determining the next trend.

However, it is worth noting that if the price fails to confirm a break below 1.0940, it could lead to a recovery and a return to the main bullish trend.

The projected trading range for today is between the support level of 1.0850 and the resistance level of 1.1000.