EUR/USD Analysis: scope to test relevant 1.1310 support

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1362

A holiday in the US to keep the financial world gyrating around Brexit.
Chinese Q4 GDP came as expected, indicating that the economic slowdown continues deepening.

The EUR/USD pair trades lower in range in a dull start to the week, with an early advance having been rejected by selling interest aligned around 1.1380, the 61.8% retracement of the December/January rally, a level that the pair broke to the downside last Friday. The dollar is mixed across the board as uncertainty prevails. Some discouraging news came from the US over the weekend, as US-China trade talks see no progress, while the government partial shutdown continues with no light at the end of the tunnel. Furthermore, Chinese growth figures released at the beginning of the day came as expected, but clearly indicating that the economic slowdown continues deepening. Germany released December PPI data, down 0.4% MoM and up by 2.7%YoY, missing the market's expectations of 3.2%.

Wall Street will be closed today, due to the celebration of the Martin Luther King day with restricted volumes expected until the Asian opening. There's, however, one pending risk factor that can inject some action into the financial boards today, that is, Brexit. The UK PM is expected to present today an alternative plan to the one rejected by the Parliament last week. Talks have taken place throughout the weekend but seem quite unlikely that the government will be able to present something that lawmakers would like to approve.

The EUR/USD pair trades in a well limited 40 pips' range ever since the day started and as said, below a key Fibonacci resistance with a clear bearish stance in the 4 hours chart given that the early advance was also capped by a bearish 20 SMA, which keeps heading south below the 100 and 200 SMA. Technical indicators in the mentioned time frame are losing ground below their midlines, with the RSI currently at 36, anticipating further declines ahead particularly if the pair breaks below 1.1352, the multi-week low set last week, with scope then to extend its decline toward 1.1310, a strong static support level.

Support levels: 1.1360 1.1310 1.1285

Resistance levels: 1.1380 1.1425 1.1450

View Live chart for the EUR/USD

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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