EUR/USD is on the back foot towards the lowest level since the pandemic began

There is little chance of a risk rally in the current market environment as investors worry about a lockdown in Beijing affecting global inflation. Furthermore, the European Union might impose a price cap on Russian crude imports after Moscow said it was pointless at this point to call for a ceasefire in Ukraine.

Later in the day, the US will release Durable Goods Orders and New Home Sales data. Better than expected data should lend further support to the US dollar. Still, they might not be enough to dominate market risk flows. In addition, the Conference Board will release its Consumer Confidence Index for April.

Technical view

On the daily chart, the euro resumed falling after forming a shooting star at the 1.09355 resistance. Descending moving averages and lower price ceilings indicate a downward trend. After breaking below the last week's price floor at 1.07566, it seems that sellers have enough incentive to lower the price further. If bearish momentum prevails in the same way, the 1.06478 barrier will be in the spotlight. This level is near the two-year low since the pandemic began. Overcoming this significant support in the medium term could lead to a further decline towards the 1.05784 mark. As long as fundamental data come in favour of the dollar it could weigh on the EUR/USD. If the 1.05784 hurdle fails to provide adequate support, the next price target can be estimated at the 1.04671 handle.

Alternatively, suppose the buying forces return to the market. In that case, the price may be able to rise to the broken support of 1.07566. With buyers overcoming this barrier, the price will likely meet the resistance of 1.09355 again.

Momentum oscillators confirm the bearish bias. The RSI, which has been fluctuating in the selling area for a long time, is falling to 30. Also, the momentum has formed a downtrend below the 100 threshold. The MACD histogram also managed to cross below the signal line again, dipping in the negative area.