EURUSD moves lower on the more hawkish Fed cut

The EURUSD currency pair has recently experienced a notable downward movement, descending to test the critical 50% Fibonacci retracement level of the trading range that has been established since the beginning of 2022. This particular midpoint is significant as it often serves as a psychological barrier for traders, influencing their decisions and market sentiment. Earlier in November, the price action dipped below this pivotal 50% level, which set the stage for a subsequent decline that culminated in a low of 1.0332. This low marks the lowest point reached by the EURUSD since November 29, 2022, indicating a significant shift in market dynamics and trader sentiment during this period.

As the price moves below the 50% retracement level, market participants are likely to shift their focus towards a key swing area identified between the levels of 1.0348 and 1.03657. This zone is critical as it represents a potential support region where buyers may step in to prevent further declines. If the price continues to break below this swing area, the next target for traders would likely be the recent low of 1.0332, which serves as the 2024 low for the currency pair. A breach of this level could signal a deeper bearish trend and might prompt further selling pressure, leading to increased volatility in the market.

Conversely, if the EURUSD manages to hold above the 50% retracement level, it could indicate a potential reversal or stabilization in the market. In such a scenario, traders would likely turn their attention to the swing area between 1.0448 and 1.0461, which would then become the new upside resistance. This area could act as a barrier to further upward movement, as sellers may emerge to capitalize on any rallies towards this resistance zone. Thus, the interplay between these key levels will be crucial in determining the future direction of the EURUSD pair, as traders navigate the complexities of the foreign exchange market.

Chris