EUR/USD falls below the 200-day SMA at the end of the week
- The EUR/USD fell below the 200-day SMA of 1.0800 towards the 1.0795 area to close the week.
- The Euro tallied a fourth consecutive weekly loss against the USD.
- The cautious stance by Christine Lagarde at the Jackson Hole Symposium weakens the Euro.
In Friday’s session, the EUR/USD bears broke through the 200-day Simple Moving Average (SMA) of 1.0800, setting a 0.72% weekly loss, its fourth in a row. In addition,the 20 and 100-day SMAs performed a bearish cross, suggesting that further downside may be on the horizon for the pair.
At Jackson Hole, Christine Lagarde, president of the European Central Bank (ECB), didn’t provide any highlights. She stated that the bank is ready to raise as much as possible rates but that a multi-legged approach is needed for effective policy. As for now, ECB expectations remain subdued, mainly driven by poor results shown by the Eurozone and according to the World Interest Rates Probabilities (WIRP), investors bet on 40% and 55% odds of a 25 basis point (bps) hike in the September and October meetings.
EUR/USD Levels to watch
Based on the daily chart, it is evident that EUR/USD leans toward a bearish outlook in the short term. Relative Strength Index (RSI) remains below its midline in negative territory, showcasing a southward slope nearing oversold conditions. Similarly, the Moving Average Convergence Divergence (MACD) exhibits red bars, emphasising the strengthening bearish momentum for EUR/USD. On the other hand, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), indicating that the sellers now dominate on the broader perspective.
Support levels: 1.0780, 1.0750, 1.0730.
Resistance levels: 1.0800 (200-day SMA), 1.0850, 1.0900.
EUR/USD Daily chart
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Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
