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Dollar recovers lost ground
Hi, dear traders!
EUR/USD has substantially declined over the past days, particularly yesterday, as demand for safe assets such as USD returns. The euro is also under pressure from the annual inflation rate of 5%, soaring energy prices, and the new wave of COVID-19 triggered by the Omicron strain. These factors have pushed the pair down over the past few days.
Today's economic calendar is very light. US housing permits and housing starts data will be released today. Recently, the market has not reacted significantly to even the most important data releases, making technical factors the main driver of the pair's price movements.
Daily
According to the daily chart, if EUR/USD rises above the Ichimoku cloud, it would encounter resistance from the black 89-day EMA line, the strong technical level of 1.1460 and the 38.2% Fibonacci level of the 1.1909-1.1187 decline. EUR/USD failed to overcome 1.1483 and test 1.1500. The pair reversed downwards the following day and returned to the 50-day SMA line before increasing slightly early on Wednesday.
The market sentiment has become bearish, as previously indicated by the highlighted candle of January 13 with a long upper shadow. Bearish traders managed to push the pair down from the Ichimoku cloud. At this moment, opening short positions is the main trading strategy. They can be considered near 1.1350, should the pair attempt to return to the Ichimoku cloud and break through the blue Kijun-Sen line upwards.
Good luck!
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