Technical Bias: Bearish
Key Takeaways
Euro fell sharply against the US dollar this past week and looks set for further losses moving ahead.
Euro zone manufacturing PMI will be released today, which might cause swing moves in the EURUSD pair.
EURUSD has a support around the 1.1150 area where the Euro buyers might take a stand.
Euro downside accelerated this past and the hope for a major correction was varnished, which means it might move further lower.
Technical Analysis
The EURUSD pair managed to correct higher recently, but the Euro sellers protected the upside in the pair and took it lower again. There is a bearish trend line on the daily timeframe, which was one the reasons why the EURUSD pair failed to move higher. The pair also failed around the 38.2% fib retracement level of the last leg from the 1.1988 high to 1.1101 low. The daily RSI is heading towards the extreme levels, which means there is a possibility of a short-term correction. However, in that situation, the last swing high of 1.1280 level might come into play and could stall the upside in the near term. Any further upside might take the pair towards the highlighted trend line which might be considered as a barrier for the pair.
If the EURUSD pair continues to move lower, then the 1.1150 level might act as a support for the pair, and a break below the same might call for a test of the yearly low.
A test of 1.10 level is also likely if the Euro sellers gain control.
Euro Zone Manufacturing PMI
Later during the London session, the Euro zone Manufacturing Purchasing Managers Index (PMI) will be released by the Markit Economics. The forecast is slated for a minor rise from the last reading of 51 to 51.1.
Trade Idea
One might consider selling rallies towards the highlighted trend line in the EURUSD pair.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.