EUR/USD Price Analysis: Retreats towards 1.0550 after reaching a weekly high around 1.0600

• The  EUR/USD shifted positively in the week and is gaining 0.34%.
• US recession fears shifted sentiment negatively, though boosted appetite for safe-haven peers, except for the US Dollar.
• EUR/USD Price Forecast: Failure at 1.0600 will pave the way for further losses.

EUR/USD soars sharply above the 1.0500 mark for the first time in the week and extends its gains for the third consecutive day after Fed Wednesday’s afternoon hike, that tumbled the major towards weekly lows around 1.0350, though staged a comeback and now is trading at weekly highs near 1.0601. At the time of writing, the EUR/USD is trading at 1.0552.

Risk aversion is the name of the game in the financial markets. US equities tumbled between 2.40% and 4.98%, while Asian stocks futures are set for a lower open. Weaker than expected US housing data reignited recession fears as more central banks were added to the list of the ones that are tightening monetary conditions. On Thursday, the Bank of England (BoE) raised rates by 25 bps, while the Swiss National Bank (SNB) surprised everybody by hiking 50 bps.

In the meantime, some ECB speakers crossed the wires, though they did not help the EUR/USD, which is rallying on the back of pure US Dollar weakness. The US Dollar Index, a measure of the buck’s value against a basket of six currencies, plunged 1%, down at 103.813, underpinned by falling US Treasury yields.

• Read also: EUR/USD climbs above the 1.0500 figure due to a softer US dollar

EUR/USD Price Forecast: Technical outlook

In the news piece mentioned above, I wrote, “The EUR/USD 1-hour chart depicts the pair trading above a double bottom neckline in the near term,” and added that the EUR/USD might pull back before reaching the double bottom target at 1.0550. The truth is that the EUR/USD extended its gains, fulfilled the double bottom target, and extended its gains towards 1.0600 before retreating towards the 1-hour chart double bottom target, at around 1.0550.

Despite Thursday’s late EUR/USD rally, the downward bias remains unless EUR bulls recover the 1.0800 mark. Also, the EUR/USD retracement from weekly highs around 1.0600 and the RSI shifting trendless at 4629 within negative territory could open the door for further losses.

Therefore, the EUR/USD first support would be 1.0500. Once cleared, the EUR7USD next support would be 1.0400, followed by the YTD Low at 1.0348

Key Technical Levels