EUR/USD analysis: correcting oversold conditions, still at risk of falling
|EUR/USD Current Price: 1.1166
- EUR/USD consolidating recent losses near the yearly low of 1.1110.
- Risk-aversion remains as the main theme, although the absence of fresh headlines kept majors ranging.
It was a dull start to the week for European currencies, which spent the day consolidating their recent losses. The EUR/USD pair extended its decline by a few pips, falling to 1.1150, yet unable to advance beyond 1.1170, where it has the 61.8% retracement of the 1.1110/1.1264 run. Risk-averse headlines dominated the news feeds, although most of them related to familiar issues, named the US-Sino trade war and Brexit, failing to provide a fresh catalyst. Minor data released in both economies failed to motivate market players, as the German PPI came in mixed, up monthly basis and down when compared to a year earlier, while the seasonally adjusted EU March Current Account disappointed with €24.7B. In the US, the Chicago Fed National Activity Index declined in April to -0.45 while March figure was upwardly revised to 0.05.
This Tuesday, the macroeconomic calendar will also be quite light, as the EU will only release May Consumer Confidence, as estimated by the EU Commission, seen improving just modestly, to -7.6 vs. the previous -7.9, while the US will publish April Existing Home Sales seen increasing by 2.6% after falling 4.9% in the previous month.
The EUR/USD pair heads into the Asian opening trading near a daily high of 1.1174, with volatility reduced to minimums around it, and still at risk of falling further, as the pair struggles with a critical Fibonacci level, the 61.8% retracement of the latest bullish run, unable to settle above it. The 4 hours chart shows that the 20 SMA keeps heading south below the larger ones and above the current level, the Momentum indicator remains weak well into negative ground, while the RSI corrected up to the current 42 level, now losing upward strength, all of which maintains the risk skewed to the downside.
Support levels: 1.1150 1.1110 1.1080
Resistance levels: 1.1190 1.1220 1.1245
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