EUR/USD Analysis: slide driven by sentiment
|EUR/USD Current price: 1.1023
- EUR pressured by trade tensions between the US and the EU, oil prices.
- EUR/USD bearish case stronger once below 1.1020 an immediate Fibonacci support.
The EUR/USD pair trades near a daily low of 1.1022, weighed by the ruling negative sentiment, triggered by weekend news. In one hand, the World Trade Organization ruled in favor of the US in the case of illegal subsidies granted to European aerospace Airbus. Fears are that the US will now impose punitive tariffs to EU products for as much as $21billion. On the other hand, news showed that one of the world’s largest oil facilities in Saudi Arabia was attacked by drone, and estimates indicate that it cut as much as 5mbpd of Saudi oil production. Houthi rebels claimed they were behind the attack. Crude oil prices soared dragging alongside safe-haven assets.
There were no macroeconomic releases in the EU, and the US has just released a minor report, the NY Empire State Manufacturing Index, which resulted at 2 in September, down from 4.8 in August and below the expected 4.0.
Wall Street is poised to open lower, although off early lows, while government bond yields are on retreat mode, reflecting the dismal sentiment, and probably maintaining the shared currency under pressure through the rest of the day.
EUR/USD short-term technical outlook
The EUR/USD pair is trading just a few pips above a Fibonacci support, the 38.2% retracement of its latest daily decline at 1.1020 after repeatedly failing to close a day above the 61.8% retracement of the same slide. In the 4 hours chart, the pair has broken below its 20 and 100 SMA, both converging with another Fibonacci level at 1.1045, the immediate resistance. Technical indicators are heading firmly lower, with the RSI already within negative ground, favoring downward extension for the upcoming hours.
Support levels: 1.1020 1.0990 1.0955
Resistance levels: 1.1045 1.1080 1.1120
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