- The EUR/USD has dropped closed for 1000 pips in four months.
- Monthly chart signals bear revival in the EUR/USD pair.
Currently, the EUR/USD pair is trading at 1.1560, having clocked a high of 1.2556 in February. The 1000-pip sell-off in the common currency seems to have put the bears back into the driver's seat, the monthly chart indicates.
Monthly chart
Chart Source: Netstation
The decline from 1.2556 to 1.1560 represents bull failure:
- Inability to cut through the falling trendline (drawn from July 2008 high and May 2011 high) in a convincing manner.
- Rejection at the 200-month MA and 1.2517 - 38.2% Fib R of Jan 2008 high - Jan 2017 low).
- Inability to capitalize on the move above the long-term head-and-shoulders neckline.
The chart also shows the 5-month moving average (MA) and the 10-month moving average (MA) has rolled over in favor of the bears and the 100-month MA has crossed the 200-month MA in the EUR-negative manner.
Further, acceptance below the descending (bearish) 50-month MA would only embolden the bears and shall put the focus back on the death cross (50-month and 200-month MA bear cross seen in November 2016).
The relative strength index (RSI) has also regained bearish bias (back below 50.00). So, it appears the pair could revisit lows below 1.05 in the next 12 months or so.
At press time, the 14-day relative strength index (RSI) shows the pair is most oversold in over three years. So, a short-term corrective rally could be in the offing. However, only a convincing move above 1.20 would abort the bearish view put forward by the monthly chart.
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.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.