EUR: Bearish divergence with technical indicators moving lower - BBH

Sandeep Kanihama FXStreet Contributor

The euro's technical tone indicates a bearish divergence as technical indicators are moving lower even though at mid-week the euro made a marginal new high, explains the analysis team at BBH.

Key Quotes

“The five and 20-day moving averages crossed for the first time in nearly two months. Our lingering concern is that interest rate differentials, at the two- and ten-year spread has moved to the US. Arguably it is a function of disappointing US economic data (less consumption, subsiding price pressures, fewer inventories), and a backing up of eurozone interest rates, especially in Germany. A break of $1.1110 is needed to signal the morphing of the broadly sideways consolidation to an outright correction. On the upside, a move above the $1.1220 area may be seen as an early signal of a running start at the $1.13 cap.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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