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The EURUSD pair ended last week in the green, however, the overall technical picture is still very bearish, while the fundamental picture is worse as the FED is set for six rate hikes this year.
I think reading too much into last weeks push higher is not wise at this stage, especially if we consider that the EURUSD is technically bearish across the lower and higher time frames still.
Bulls would need to move the price above the 1.1200 level to change the short-term technical outlook at this stage. Moreover, the long-term trend is bearish while the EURUSD is capped under the 1.1500 level.
Potentially, US CPI readings are going to become a lot higher, as energy price and food price spiral higher. This is not going to be bullish for the EURUSD pair.
Additionally, we need to consider the Ukraine situation. The euro is in dire straits while the Ukraine crisis ravages, and the supply chain is broken across the eurozone.
I would only add that if the US dollar is stopped being used for oil purchases in Saudi Arabia, then the trend could change for the EURUSD pair.
Sentiment has seen a big shift since last week. I believe that the positive positioning skew amongst retail traders has dropped by around 20 percent, further warning of a short-term chance.
However, I think that we probably need to see EURUSD traders turning wholesale negative before thinking about a medium-term long position.
EURUSD Short-Term Technical Analysis
The four-hour time frame shows that the EURUSD pair has retested a formed breakout spot, around 1.1100, and failed to move higher.
According to the four-hour time frame, the price trend is still bearish while the price is capped under 1.1200 in the short-term. Additionally, a bearish wedge pattern has formed, further highlighting a negative outlook.
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EURUSD Medium-Term Technical Analysis
Looking at the daily time frame, bulls have a glimmer of hope while the price is trading above the 1.0900 level, although it is only a slim hope of a recovery at this stage.
I would also like to state that if the 1.0800 level is broken at any stage this year then downside risks start to increase, and we could well see the EURUSD pair at parity.
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