The downward pressure around the EUR / USD remains another day and forces the common currency to fall close to the psychological support of 1.20 during the American session on Wednesday. Due to the persistent appetite for risk, which benefits the firm demand for the US dollar.
The drop in EUR / USD, is about to challenge the key 1.20 level in the short term. While the outlook for the pair looks bearish in the very short term, it remains constructive in the long term and is always supported by the prospects for a strong recovery.
As it is supported by additional fiscal stimulus from the Fed and the ECB, this could strengthen the EUR / USD, in addition, real interest rates continue to favor the euro-zone against the US, which is also another factor that backs the euro.
On the technical level, in 4-hour charts we note that the EUR / USD pair is showing an oversold signal, approaching the Murray 2/8 zone at 1.1962, this level is key as it could offer a technical rebound in the medium term.
For now it is under downward pressure below the 200 EMA and 21 SMA, which indicates that it is facing a possibility of a break of the psychological level 1.20 and one more fall to the support of 1.1962. The eagle indicator is in the oversold zone.
We can also note that the EUR / USD pair has a downtrend channel in 4-hour charts, and the channel line coincides with 1.1962, further supporting the downward pressure of the pair, on the other hand, a pullback towards the SMA of 21 will be a good opportunity to sell.
The market sentiment report shows a figure of 56.7% of operators who are selling the EUR / USD pair, this is a sign that we could see a recovery of the EUR / USD in the medium term.
Support And Resistance Levels For February 03 - 04, 2021
Resistance (1) 1.2068
Resistance (2) 1.2125
Resistance (3) 1.2167
Support (1) 1.2000
Support (2) 1.1969
Support (3) 1.1943
Trading tip for EUR/USD for February 03 - 04, 2021
Buy above 1.2000 (psychological level) with take profit at 1.2085 (SMA 21), stop loss below 1.1962.
Buy if rebound at 1.1962 (2/8 of murray) with take profit at 1.20 and 1.2050 , stop loss below 1.1930.
Sell if pullback to 1.2085, with take profit at 1.20, stop loss above 1.2120.
