On July 18, we wrote about the vulnerability of the market to a rollback from the block of resistance, which is formed by the level of 1.12 euros per US dollar and the upper line of the rising channel. Since then, the EUR/USD price has fallen by more than 1%.
The most noticeable was yesterday’s decline in the price of EUR/USD, which was due, among other things, to the rise in price of the dollar due to a strong report on the US labor market. Weekly data showed that jobless claims fell to a nearly 2-month low.
How deep can the EUR/USD price pull back from the resistance block?
If the decline continues, then, from the point of view of technical analysis, the horizontal level 1.075 can be considered the level at which the bulls can try to change the situation:
- in April-May this level worked as resistance;
- approximately, here passes the Fibonacci line 50% of the growth A→B.
The decision of the ECB to raise interest rates by 25 basis points could lead to bullish momentum in the EUR/USD price. The decision will be announced on July 27.