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The weaker tone in risk sentiment has started to weigh on the EURUSD pair, with the classic “Ukraine Traders” starting to come back, meaning higher oil prices and a higher US dollar.
As the war escalates, and NATO contemplate more action against Russia, financial markets are starting to react again, after recently losing focus on the Ukrainian war.
As markets turn their focus back the Ukraine the euro has started to turn lower. This was a major theme during the start of the crisis, and one that could come back in vogue.
A bearish breakout has taken place from a triangle patter to further weaken the short-term technical, while the Ichimoku indicator continues to flash a strong sell signal.
Going forward, unless we see a big change from the ECB in terms of monetary policy, it is going to be a difficult road ahead for the EURUSD pair in this environment.
Sentiment is also in favour of more loss. The ActivTrader market sentiment tool shows that some 68% of traders are currently bullish towards the EURUSD pair.
However, I think that we probably need to see EURUSD traders turning wholesale negative before thinking about a medium-term recovery in the EURUSD pair.
EURUSD Short-Term Technical Analysis
The four-hour time frame shows that the EURUSD pair has failed to move higher and has started to break under a bearish rising wedge type price pattern.
According to the four-hour time frame, the price trend is still bearish while the price is capped under 1.1050 in the short-term. Additionally, the bearish wedge pattern breakout is further highlighting a negative outlook.
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EURUSD Medium-Term Technical Analysis
Looking at the daily time frame, the Ichimoku indicator is still flashing a strong sell signal, and there is really very little reason to be bullish at this juncture.
I would also like to state that the Lagging Line (Green Line) is flashing a huge continuation lower sell signal, which is very, very bearish over the medium-term.
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