EUR/USD: Bearish monthly close, but China stimulus talk could shake out weak bears

The EUR/USD's close below the 50-month MA is bearish.
The bearish technical development is backed by widening the US-German (DE) yield differential.
China stimulus talks and the resulting risk-on could see EUR/USD revisit the 50-month MA.

Omkar Godbole FXStreet Contributor

The EUR/USD pair closed well below the key support of 50-month simple moving average (SMA) yesterday, signaling a resumption of the sell-off from the February high of $1.2556.

The greenback surged across the board yesterday after the official data showed that pay for US workers rose 0.9 percent from July to September, pushing yearly earnings growth to the highest level since the 2008 recession.

Meanwhile, the spread between the 10-year US treasury yield and its German counterpart increased to 278 basis points – the highest level since 1989.

The combination of the widening US-DE yield spread and a bearish monthly close indicates that for the EUR, the path of least resistance is on the downside.

However, despite bearish expectations, the pair may shake out weak bears by revisiting the 50-month SMA of 1.1370 today, as the European and the US equities are likely to cheer China stimulus talks.

EUR/USD Technical Levels

EUR/USD

Overview:
    Last Price: 1.1343
    Daily change: 31 pips
    Daily change: 0.274%
    Daily Open: 1.1312
Trends:
    Daily SMA20: 1.1472
    Daily SMA50: 1.1575
    Daily SMA100: 1.1593
    Daily SMA200: 1.1876
Levels:
    Daily High: 1.1362
    Daily Low: 1.1302
    Weekly High: 1.1551
    Weekly Low: 1.1336
    Monthly High: 1.1625
    Monthly Low: 1.1302
    Daily Fibonacci 38.2%: 1.1325
    Daily Fibonacci 61.8%: 1.1339
    Daily Pivot Point S1: 1.1289
    Daily Pivot Point S2: 1.1266
    Daily Pivot Point S3: 1.1229
    Daily Pivot Point R1: 1.1348
    Daily Pivot Point R2: 1.1385
    Daily Pivot Point R3: 1.1408

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 sticks to positive bias above 1.1800 as trade jitters undermine USD

The EUR/USD pair builds on the previous day's modest gains and attracts some buyers for the second straight day on Thursday amid a softer US Dollar. Spot prices, however, lack bullish conviction and trade around the 1.1815-1.1820 area during the Asian session, up 0.10% for the day.

GBP/USD bounces as soft CPI boosts BoE cut bets

GBP/USD rose 0.42% on Wednesday, recovering toward 1.3600 in a session shaped by softer-than-expected UK inflation data and broad US Dollar weakness. The pair had been consolidating in a tight range between about 1.3450 and 1.3520 for the past few days following the sharp pullback from the late-January high near 1.3870, and Wednesday's move pushed price action back onto the high side of key moving averages.

Gold struggle with $5,200 extends ahead of more US-Iran talks

Gold is replicating the recovery moves seen in Wednesday’s Asian trading early Thursday, as buyers continue to flirt with the $5,200 level. Sustained US Dollar weakness and looming US-Iran talks aid the bright metal’s rebound.

Michael Saylor unveils Bitcoin-backed "Digital Credit" vision at Strategy World

Strategy CEO Michael Saylor delivered a keynote titled "Digital Credit" on Tuesday at Strategy World, positioning Bitcoin as the foundation of a new financial system built on what he described as "digital capital."

Nvidia delivers another monster earnings report, and forecasts big things to come

It was another monster earnings report from Nvidia for fiscal Q4. Revenues were $68.1bn, smashing estimates of $65bn. Gross profit margin was a healthy 75%, up from 73.5% in the prior quarter, and the outlook for this quarter was monstrous.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.