EUR/USD Price Analysis: Eyes a sustained move below key 1.1665 support

• EUR/USD remains exposed to further downside risks.
• DXY takes a breather but yields remain supported by the hawkish Fed.
• Eurozone energy crisis to weigh amid a downside breakout on the 1D chart.

EUR/USD is fading the Asian bounce, as the risks remain tilted to the downside amid the Fed’s hawkish shift and the Euro area energy crisis.

The latest hawkish comments from the Fed policymakers continue to reinforce expectations of sooner-than-expected monetary policy normalization, driving the US Treasury yields and the greenback higher.

Meanwhile, Europe struggles with soaring oil and gas prices, which has triggered a shortage in power across the old continent, leading to factory shutdowns and fuelling economic growth concerns. This will likely continue to bode ill for the euro.

The pair keeps its range below the 1.1700 mark, awaiting Fed Chair Jerome Powell’s and ECB President Christine Lagarde’s speeches for fresh direction in the price.

EUR/USD’s daily chart continues to indicate downside risks, especially after the price gave a daily closing below the critical rising trendline support at 1.1685.

The 14-day Relative Strength Index (RSI) continues to trend below the midline, suggesting that there is more room for the downside.  

A bear cross confirmed on the said time frame, with the 21-Daily Moving Average (DMA) having cut the 50-DMA from above, adds credence to the bearish bias.

Therefore, the EUR bears eye a sustained break below 1.1664, the August lows, which would exemplify the decline towards 1.1650 psychological level.

The next relevant support awaits at 1.1600, the round number.

EUR/USD: Daily chart

Alternatively, recapturing the previous support now resistance at 1.1685 is critical to take on the recovery towards $1700.

Further up, strong resistance could emerge around 1.1750, where Monday’s high is located.

EUR/USD: Additional levels to consider