EURUSD Daily Analysis – May 22, 2023

The EURUSD currency pair continues to face challenges as it remains below a prominent falling trend line on the 4-hour chart, reaffirming its downtrend from 1.1091. The price action following the bounce from 1.0759 can be interpreted as a period of consolidation within the overarching downtrend, signaling caution for traders.

As long as the price remains below the trend line, the bearish bias is expected to persist. Traders will closely monitor the developments, particularly for a potential breakdown below the 1.0759 support level. Such a breakdown would likely trigger further downside movement, with the next immediate target at the 1.0710 support level. Should selling pressure intensify, the pair could aim for the 1.0600 area, where additional support may be found.

However, it’s worth noting that market conditions can be dynamic and subject to change. A breakout above the trend line resistance would present a shift in the current narrative. Such a move could bring the price back towards the key resistance level at 1.0909. If this resistance is convincingly surpassed, it could potentially open the door for another upward push towards the 1.1100 level.

In summary, the EURUSD currency pair struggles to break above a falling trend line on the 4-hour chart, underscoring its continued downtrend from 1.1091. The recent bounce from 1.0759 should be viewed with caution as potential consolidation within the larger downtrend. A breakdown below 1.0759 could trigger further downside movement towards 1.0710, followed by 1.0600. Conversely, a breakout above the trend line resistance could lead to a retest of 1.0909 resistance, signaling a possible upward move towards 1.1100. Traders should remain attentive to market developments and adapt their strategies accordingly in response to changing conditions.