• EUR/USD remains stuck in a narrow range in the mid-1.1300s. 
  • Concerns about China, euro-zone growth, and the US shutdown prevail.
  • The technical picture remains bearish for the pair.

The world's most popular currency pair is stuck in the same familiar range once again, around 1.1360 at the time of writing and the day's range is just below 20 pips. These low volatility situations do not last for too long. Where will the pair go to when it begins moving? 

There are three reasons why bears may have the upper hand.

1) Global growth worries

Early in the week, China reported the slowest growth levels since 1990. Trade talks between China and the US are not going anywhere fast. The Bank of Japan warned about global growth, and so did the International Monetary Fund. And the US government shutdown is also beginning to weigh on sentiment.

In the old continent, the European Union's Pierre Moscovici added his concerns as well. The German ZEW figures showed a deterioration in current conditions. 

Stocks are on the back foot amid this growing gloom, and the US Dollar finds demand as a safe-haven currency.

2) Draghi is ready to drag

Mario Draghi, the Italian President of the European Central Bank, has been putting a brave face in recent public appearances, acknowledging the slowdown but also remaining optimistic. 

But for how long? He is usually quite dovish and cannot ignore worrying signs, whether they come from his own country's clash with Brussels or China.

Tensions are mounting towards the first ECB decision of 2019 coming on Thursday, and his tone may weigh on Euro.

3) Technical: Bears are in control

EUR USD Technical Analysis January 23 2019

The four-hour chart shows that the pair continues trading in the downtrend channel that formed last week. The recent stagnation pushed euro/dollar closer to the upper end of the channel and it may now fall towards the lower end.

Another bearish sign comes from the Simple Moving Averages. The 50 SMA is crossing the 200 SMA to the downside, indicating further falls. 

Momentum remains to the downside, and the Relative Strength Index (RSI) is still above 30. This implies that the pair does not suffer from oversold conditions.

Some support awaits at 1.1355 which was a low point late last week. The next level to watch is 1.1335 that cushioned the pair on Tuesday. More significant support is at the 2019 low of 1.1310. Next, we find the double-bottom at 1.1270 and 1.1215, the 2018 low.

Looking up, 1.1380 held the pair down earlier in the week. 1.1410 was a stubborn cap last week, and 1.1450 served as support around that earlier in January. 1.1480 was the peak just before the sell-off.

More: EUR/USD faces a wall of resistance, further falls coming? – Confluence Detector

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD falls through 1.0100 amid renewed dollar strength

EUR/USD falls through 1.0100 amid renewed dollar strength

EUR/USD came under heavy bearish pressure, now trading below the 1.0100 level and at its lowest for this month. Although the data from the US showed that Existing Home Sales fell sharply in July, the economy seems resilient to global woes.


GBP/USD slumps to multi-week lows and nears 1.1900

GBP/USD slumps to multi-week lows and nears 1.1900

GBP/USD extended its daily slide and touched its weakest level since mid-July in the 1.1920 price zone. The broad-based dollar strength, as reflected by a more than 0.5% increase in the US Dollar Index, forces the pair to continue to stretch lower in the American session.


Gold bearish breakout underway

Gold bearish breakout underway

Gold is losing ground for a fourth consecutive day, trading at fresh weekly lows. The metal suffers from renewed dollar strength, as US data suggest the economy remains resilient to the latest global woes, leaving room for the Fed to maintain its aggressive stance.

Gold News

Why XTZ traders need to be glued to the screen for next 48 hours

Why XTZ traders need to be glued to the screen for next 48 hours

Tezos price will likely take a key turn lower today after the bullish print on Wednesday. XTZ price is at the mercy of global markets rolling over this morning. Either the technical support handles hold – or break under dollar pressure.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!