Trading Signal for EUR/USD for June 03 - 04, 2021: Sell Below 1.2230

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In the European pre-market, the EUR / USD pair is trading below the SMA of 21 and below a downtrend channel, drawn from the high of 1.2268, showing a slight bearish sign. If the breakdown and consolidation is confirmed below the 8/8 murray zone, the decline could intensify to the 200 EMA zone.

Yesterday EUR / USD rebounded in the 1.2163 area after having broken the diamond pattern, making a pullback to confirm the bearish outlook of this technical figure. During a consolidation below the 21 SMA, the price could fall to 1.2125 zone of the bottom of the bearish channel that coincides with the EMA of 200.

The EUR / USD pair strengthened to test the strong resistance of 1.2235. If you observe on the chart, whenever the pair has reached these levels, it has lost strength and a bearish reversal has occurred. So this level is the key. As long as EUR / USD remains below this resistance, there could be downward pressure.

On the other hand, the dollar index (USDX) fell to the 89.85 area, due to a drop in bond yields. The 10-year Treasury yield fell to 1.59%, moving further away from 1.64% (June 1 high). At this time of writing, it is rebounding to above 3/8 murray which is a sign that there could be a bullish move in the short term to the 90.35 zone.

The attention of investors and traders is focused on the NFP report on Friday in May. It is likely that one day before this announcement, the market will trade sideways within a range of 1.2230 to 1.2165. A daily close below 1.2160 would be negative for the euro.

Our recommendation is to sell below 1.2230 and below 1.2207 with short-term targets up to the 200 EMA around 1.2125.

Support and Resistance Levels for June 03 – 04, 2021

Resistance (3) 1.2296

Resistance (2) 1.2260

Resistance (1) 1.2233

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Support (1) 1.2171

Support (2) 1.2135

Support (3) 1.2108

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Trading tip for EUR/USD for June 03 - 04, 2021

Sell below 1.2230 and 1.2207 (SMA 21 and strong resistance), with take profit at 1.2160 and 1.2125 (EMA 200) stop loss above 1.2255.

The material has been provided by InstaForex Company - www.instaforex.com

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