The EUR/USD pair failed to capitalize on the overnight attempted bounce from sub-1.1200 level and met with some heavy supply on Wednesday to hit fresh 22-month lows. The initial leg of downtick came after the disappointing release of the German IFO survey, which showed business sentiment deteriorated further in April and amplified concerns of a sharp economic slowdown in the region's largest economy. Adding to this, a steep decline in the German 10-year bond, turning negative again, also affected the shared currency in a negative manner.
Meanwhile, the recent US Dollar bullish run also picked up the pace on Wednesday, lifting the key USD index through the 98.00 handle to its highest level since June 2017, and further collaborated to the pair's sharp intraday slide. The pair took along some heavy trading stops placed near the 1.1185-75 region, marking 61.8% Fibonacci retracement level of 1.0341-1.2556 up-move, and tumbled to an intraday low level of 1.1141, albeit the bearish pressure now seems to have abated as market participants now look forward to the release of US durable goods orders data for some fresh impetus.
From a technical perspective, the pair has already found acceptance below the mentioned Fibo. level, confirming a near-term bearish breakdown. With technical indicators on the daily chart still far from being in the oversold territory, the downward momentum is likely to get extended towards the 1.1100 round figure mark before the pair eventually drops to test a short-term descending trend-line support, currently near mid-1.1000s.
On the flip side, any attempted bounce might now confront immediate resistance near the support break-point, around the 1.1175-85 region and is closely followed by the 1.1200-10 supply zone, which if cleared might trigger a short-covering bounce back towards weekly tops, around the 1.1255-60 region.
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 daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.