EUR/USD analysis: at a brink of breaking lower
|EUR/USD Current price: 1.1543
- Risk sentiment hurt further the common currency, EUR/USD nears yearly low.
- Trade war between the US and China to affect the global economy.
The EUR/USD pair is trading a handful of pips away from its yearly low of 1.1509, hurt by risk aversion after Trump announced another set of tariffs of up to $200B on Chinese goods' imports. Concerns that the trade war between the two countries will have consequences in the global economy spurred the negative sentiment that rules the financial world today. In the data front, EU data was disappointing, as the April Current Account resulted at €28.4B, below the previous and the expected €30.3B. Construction output was up 1.8% in April, beating expectations of -0.8%, although the annual reading came in at 1.8% below the 2.0% expected. In the US, Housing Starts soared 5.0% in May, although Building Permits sunk 4.6%. The market is any way focused on equities and government bond yields, plummeting worldwide.
The pair's 4-hour chart shows that the decline could continue, as an early attempt to recover ground was contained by selling interest around a sharply bearish 20 SMA, while technical indicators gyrated south, both now in bearish territory and with the RSI nearing oversold conditions. Below the mentioned daily low, the pair has room to extend its decline to the 1.1420 price zone, particularly if the negative sentiment extends during US trading hours.
Support levels: 1.1510 1.1460 1.1420
Resistance levels: 1.1590 1.1630 1.1660
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