- EUR/USD continues moving down as the USD moves up.
- The global slowdown is favorable for the US Dollar.
- The technical picture turned bearish for the pair.
EUR/USD is trading closer to 1.1400, extending its falls. The primary narrative in markets is that the US is the "cleanest shirt in the dirty pile." While the US central bank turned dovish, the economy is still outperforming the rest of the world. This outperformance was reflected in the upbeat Non-Farm Payrolls report on Friday.
And how is the euro-zone doing? The Sentix Investor Confidence published on Monday dropped to -3.7, reflecting growing pessimism. The final euro-zone Services PMI came out at 51.2, for January, an upgrade from 50.8 reported initially.
However, the number is hardly above the 50-point threshold that separates growth from contraction. It is far from 57.6 seen in the US in December, with no significant changes expected.
See: US Services Purchasing Managers' Index: Shutdown, what shutdown?
Not all is rosy in the US: Factory Orders dropped by 0.6% in December, worse than had been expected. Nevertheless, the American economy is still on top.
Apart from the ISM data from the US, markets await President Donald Trump's State of the Union speech in the early hours of Wednesday. Any mention of infrastructure spending and tax cuts could boost markets.
EUR/USD Technical Analysis
-636849568028271426.png)
On its way down, several indicators turned bearish. EUR/USD crossed both the 50 and 200 Simple Moving Averages. Losing both lines at once is a bearish sign. Also, Momentum turned negative after quite a few positive days. The Relative Strength Index is leaning lower but has not reached oversold conditions just yet.
All in all, the bears are in control.
1.1405 was a swing low in late January and is followed by last week's low point of 1.1390. Further down, 1.1340 was a low point in mid-January. 1.1310 was a double bottom back in December, and 1.1290 is the 2019 low.
Looking up, 1.1430 provided support in late January, and 1.1450 capped the pair beforehand. 1.1490 was a swing high in the wake of the new month, and 1.1515 was the post-Fed peak.
More: EUR/USD will find it hard to recover after the recent slide – 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.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.