EUR/USD Analysis: bears waiting for a catalyst
|EUR/USD Current price: 1.1165
- Mixed European data overshadowed by persistent trade concerns.
- Wall Street collapsing ahead of the opening after Trump's national emergency on cybersecurity.
The EUR/USD pair consolidates at fresh 3-week lows, not far from May's bottom at 1.1134, neither far from this year low at 1.1110. The pair saw little action throughout the first two sessions of the day, having traded in a well-limited 30 pips' range ahead of the US opening. Risk aversion, correlated to US-Sino trade relationship was exacerbated during European trading hours, as Google has broken ties with Huawei following US Trump's decision last week to declare a national emergency on cybersecurity. Equities plummeted in Europe, while US futures are also on franc decline, with the DJIA trading over 250 points below Friday's close.
European data released earlier today came in mixed, as the German monthly PPI beat expectations in April, up by 0.5%, but missed the market's forecast yearly basis, printing 2.5% vs. the previous 2.7%. The European Current Account, not seasonally adjusted, posted a better-than-expected €35.0B surplus. The US, on the other hand, released the April Chicago Fed National Activity Index, which came in worse-than-expected, at -0.45 vs. the previous 0.05. Later today's Fed's Vice-Chair Clarida, and Chief Powell will speak in different events.
The pair trades below the 61.8% retracement of the latest bullish run, maintaining the downside bias according to the 4 hours chart, although with limited bearish strength, as technical indicators stabilized near their lows, now attempting modest recoveries. Nevertheless, the pair continues trading below all of its moving averages in the mentioned chart, with the 20 SMA maintaining its bearish slope below the larger ones. The daily low at 1.1150 is the immediate support en route to the mentioned 1.1110.
Support levels: 1.1150 1.1110 1.1080
Resistance levels: 1.1175 1.1220 1.1250
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