EUR/USD analysis: consolidating near lows, bearish

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1801

US data mixed, EU one tepid, all confirming the scenario that triggered dollar's rally.
EUR/USD needs to break 1.1741, December low, to resume its decline.

The EUR/USD pair continues pivoting around 1.1800 ahead of the US opening and after the release of mixed US data. Unemployment claims in the country were slightly above expected, reaching 222K in the week ended May 11th vs. the 215K expected. The Philadelphia Fed Manufacturing Survey for May surprised to the upside, printing a solid 34.4, well above the previous 23.2 or the expected 21.0. Earlier in the day, EU Construction Output disappointed by falling more than expected, down in March 0.3%. And while none of this figures is considered a market-mover, all of them confirmed the scenario that triggered the dollar's rally these last few weeks.

In the meantime, US Treasury yields hold near multi-year highs achieved during Asian trading hours, while European equities barely stay afloat and US indexes point to open lower. The ongoing consolidation seems just a pause in the dominant bearish trend, as sellers are taking spikes to add to their positions, now aligned at 1.1840 short-term. In the 4 hours chart, the picture is bearish, despite technical indicators lack directional momentum, as they hold well into bearish territory, while moving averages maintain sharp bearish slopes well above the current level. December low at 1.1741 is the main support to break to see the pair resuming its bearish trend.

Support levels: 1.1765 1.1740 1.1710

Resistance levels: 1.1840 1.1880 1.1925

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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