EURUSD SELL LIMIT

EURUSD

Although the U.S. central bank is likely to reduce borrowing costs later this year, the deep rate cuts priced in by market participants seem extreme for an economy displaying remarkable resilience and still experiencing above-target and sticky inflation. Given current conditions, it would not be surprising to see traders scale back dovish wagers soon, paving the way for a market reversal.

Looking ahead to next week, the U.S. economic calendar is rather light, with markets closed on Monday for the Martin Luther King Jr. holiday. However, several Fed officials will have public appearances, so it is important to watch whether policymakers start pushing back against Wall Street’s dovish outlook. If they do, yields and the U.S. dollar may head higher.

In this area, price has been traveling in range, but the momentum is still bearish. Once 1.09528 is retested, we'll have a better idea of how it will play out. If price fails to break above consolidation, then we will see a continuation of the downtrend.

If price manages to break above range and gives a solid close on higher time frames, there will be a good chance that the highs will be retested.