EUR/USD Price Analysis: Bears await break below 1.1200 ahead of US-China joint statement
- EUR/USD attracts some sellers on Monday, though it lacks bearish conviction.
- A break below 200-period SMA on H4 should pave the way for deeper losses.
- Any attempted move up is likely to confront a stiff barrier near the 1.1250 region.
The EUR/USD pair kicks off the new week on a weaker note amid a modest US Dollar (USD) uptick, bolstered by the optimism over a US-China trade deal. Spot prices, however, manage to hold above the 1.1200 mark and a one-month low touched last Thursday as traders await the US-China joint statement for more details about the agreement.
From a technical perspective, the recent breakdown below the 100-period Simple Moving Average (SMA) on the 4-hour chart for the first time since early April was seen as a key trigger for bearish traders. Moreover, oscillators on the said chart are holding deep in bearish territory and have just started gaining negative traction on the daily chart, suggesting that the path of least resistance for the EUR/USD pair is to the downside.
Spot prices, however, have been showing some resilience below the 1.1200 round figure. The said handle now coincides with the 200-period SMA on the 4-hour chart, which, if broken decisively, will reaffirm the negative bias and make the EUR/USD pair vulnerable. The subsequent downfall has the potential to drag the currency pair further towards the 1.1110-1.1100 area, with some intermediate support near the 1.1130-1.1125 region.
On the flip side, the 1.1250 zone now seems to act as an immediate hurdle, above which the EUR/USD pair could aim to reclaim the 1.1300 round figure. Any further move up, however, is more likely to attract fresh sellers and remain capped near the 100-period SMA on the 4-hour chart, currently pegged near the 1.1350-1.1355 region. The latter should act as a pivotal point, which, if cleared decisively, could negate the near-term bearish bias.
EUR/USD 4-hour chart
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Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
