You are not logged in.

#1 29-08-2019 18:35:17

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2632

EUR/USD: short term technical analysis and bank forecasts

EUR/USD: short term technical analysis, bank forecast and factors to monitor

After rising at the end of last week and then correcting again at the beginning of this week, the pair exhibited a short-term downward trend as of Tuesday.

Thus, after a peak at 1.1163 this last weekend, in a final upward movement from Friday's momentum, the pair dropped to a low of 1.1080 on Wednesday, cancelling out most of last week's climb.

Looking at the charts, there are 2 important short-term downward signals: the passage below the psychological threshold of 1.11, and the breaks below the 100 and 200-hour moving averages.

If the decline continues, the 1.1065 and 1.1050 thresholds will be the first potential supports, levels below which bearish returns could target the key psychological threshold of 1.1000.

To the upside, in addition to the psychological threshold of 1.11, a resistance is at 1.1115, ahead of this week's peak at 1.1163.

Hourly EUR/USD chart

What fundamental factors have an influence on the pair at the moment?

From the point of view of fundamental factors, it should be noted that market attention remains focused on the US-China trade disagreement and its many developments.

ANZ analysts suggest that the gradual approach adopted by Trump to impose tariffs on goods from China has strengthened his determination to prolong the conflict.

"As the conflict between the China and the US is likely to intensify, there will be many risks of events that will affect market sentiment in the future."

"We still believe that China's growth prospects depend on its domestic consumption and investment, not on exports."

Lastly, to finish this review of the EUR/USD, the most traded currency pair in the forex market, let's take a look at the short-term forecasts of a few major banks:

Commerzbank and UOB have rather negative opinions of the EUR/USD pair

Karen Janes over at Commerzbank suggests that the intraday Elliott-wave count on the EUR/USD should remain "neutral to negative".

"Attention is still focused on the recent low at 1.1027 and the base of the channel falling to 1.0948. Below is the retracement from 78.6% to 1.0814. The first resistance is at the 200-day moving average at 1.1280, but key resistance is at 1.1339/58, the 2018-2019 downhill channel and the 55-week moving average."

"A weekly close above this last level is necessary for us to take a bullish position."

"The market will have to regain the 55-week moving average and the 1.1339/58 channel to generate rising interest."

Finally, according to analysts at UOB Bank, the pair's rebound is currently only considered as a corrective measure, and they believe it is unlikely to continue until a test of 1.1250.

"The underlying tone still seems to be on a downward trend and the European currency could continue to fall. That being said, a break through solid support at 1.1050 would be a surprise. On the other hand, only an rise above 1.1120 would indicate that the current slight downward pressure has eased."

Looking ahead to 1-4 weeks, the bank notes that "the current Euro move is considered a corrective rebound that has room to extend upward. However, the month's high to date near 1.1250 is solid resistance and this level could be out of reach. After the rapid decline of 26 August, 1.1180 is already a fairly solid level before 1.1220 and 1.1250. A downward break through the 1.1050 threshold would indicate that the current upward pressure has eased."

"Anything worth having is worth going for - all the way." - J.R. Ewing



Board footer