EUR/USD Remains Near the Lows

Early in another week of May, EUR/USD remains weak; the asset is consolidating around 1.0400, which is very close to the 2-year lows at 1.0348 reached last Friday.
 
Market players are doing their best to escape any risks relating to geopolitical tensions and the security of the energy supply. Because of the geopolitical escalation, gas transfer parameters to the European Union dropped by one-third. It’s not too critical as the season of the gas withdrawal is almost over – there is no hurry for the EU countries to compress it into underground storage. However, if geopolitical tensions continue, gas deliveries to Europe may drop. This will eventually slow down the Euro Area GDP. It’s very bad for the Euro.
 
One more factor that puts pressure on the European currency is that the ECB is far behind the US Fed when it comes to monetary policy tightening. It’s no secret to anybody – this difference is against the Euro.
 
In the H4 chart, after breaking 1.0700 and reaching the short-term target at 1.0472, EUR/USD completed the correction towards 1.0616; right now, it is forming another descending wave with the target at 1.0220. Later, the market may start a new correctional structure to reach 1.0700. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving below 0 and may continue falling to update the lows.
 

 
As we can see in the H1 chart, after completing the descending wave at 1.0430 and then forming a new consolidation range around this level, EUR/USD has broken it to the downside; right now, it is still falling with the short-term target at 1.0266. Later, the market may correct to test 1.0400 from below and then resume trading downwards to reach 1.0220. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after reaching 50 and forming a consolidation range around it, its signal line has broken the range to the downside and may later continue falling towards 20.
 

 
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.