Downtrend for EUR/USD strengthens with SKS formation confirmed

Downtrend for EUR/USD strengthens with SKS formation confirmed

The EUR/USD currency pair has been showing significant weakness since mid-week, especially after the release of US inflation data. The price initially fell to the level of the lows from mid-February at $1.0694. The situation worsened further on Friday as the pair fell below the neckline of the SKS formation at $1.0723 and ended the trading week at $1.0638. This confirmed the SKS formation and could lead to further downtrend, potentially supporting the creation of short positions. One possible cause of the downtrend is the expected interest rate differential between the Eurozone and the US, which could lead to capital being redirected to the US, which could strengthen the dollar.

However, the US Federal Reserve appears to be in no hurry to adjust interest rates. This could lead to the interest rate difference remaining for the time being and continuing to put pressure on the euro. If interest rates remain high and even rise in the US while they remain low or even fall in the Eurozone, this could further strengthen the dollar against the euro. It remains to be seen how economic and political developments will affect the currency pair in the coming weeks. Traders could closely monitor these developments to identify possible trading opportunities and react accordingly.