EUR/USD Forecast: Is EUR heading back to Jan 2017 lows?

The EUR/USD has dropped closed for 1000 pips in four months.
Monthly chart signals bear revival in the EUR/USD pair.

Omkar Godbole FXStreet Contributor

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.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD recovers losses despite rising UK political risks, BoE rate cut bets

Pound Sterling advances against the US Dollar after registering modest losses in the previous session, trading around 1.3650 during the Asian hours on Wednesday. The pair could extend losses as the Pound Sterling faces pressure from rising political risks in the UK and growing expectations of near-term Bank of England rate cuts.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

BNB prolonged correction signals deeper bearish momentum

BNB (BNB), formerly known as Binance Coin, is trading below $618 on Wednesday, marking the sixth consecutive day of correction since the weekend. The bearish price action is further supported by rising short bets alongside negative funding rates in the derivatives market.