EUR/USD Forecast: Not looking good ahead of Good Friday

EUR/USD dropped to the mid-1.1200s following weak German data.
The US retail sales report is eyed ahead of the weekend.
The technical picture has significantly worsened for the pair.

Yohay Elam FXStreet

EUR/USD finally moved out of range, falling down and hitting a one-week low. Euro-zone PMIs triggered the move. The most important release was the German Manufacturing PMI, which missed with 44.5 points, indicating an ongoing and substantial contraction in the all-important locomotive of the old continent.

French PMIs were mixed and Germany's services PMI slightly beat expectations, but the final word came from the euro-zone PMIs which missed on all accounts.

EUR/USD reacted with a sharp fall and is licking its wounds. The focus now shifts to the US, where retail sales are projected to show a small increase in March after drops in February.

See US Retail Sales Preview: Let the spending begin

Elsewhere, China and the US both said they made progress in trade talks and scheduled additional meetings between top officials in the next few weeks. There are also reports about attempts to find timing for a summit between presidents Donald Trump and Xi Jinping. However, markets remain somewhat skeptical and the stocks are not rising.

Most markets are closed on Friday due to the Easter holiday and some traders may rush to close positions. Choppy trading is likely today.

EUR/USD Technical Analysis

The picture has turned negative for the pair, with Momentum falling down and the Relative Strength Index dropping below 50 but remaining above 30, thus not pointing to oversold conditions. In addition, the pair slipped below both the 50 and 200 Simple Moving Averages.

Support awaits at 1.1230, the swing low that was seen last week. 1.1210 was a stubborn support line in early April and 1.1176 is the trough this year. 1.1115 follows and dates back to 2017.

1.1280 was the bottom of the range before the drop. 1.1330 was a double top this week and the top of the range. 1.1360 and 1.1390 are next.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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