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#1 24-12-2019 09:59:46

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2886

EUR/USD: nearing a break below the 100-day moving average and 1.10?

EUR/USD: is a break below the 100-day moving average and 1.10 in the cards?

The EUR/USD maintained an overall bearish profile yesterday, despite a bullish consolidation on Monday.

For the record, on Monday, US Durable Goods Orders and New Home Sales disappointed, which weighed slightly on the dollar and supported the EUR/USD.

From a technical point of view, the sell-side chart pattern that has been dominating trading since peaking just below 1.12 on 12 December remains valid, and the downtrend could therefore resume at any time.

If this is confirmed, the first support level to watch for will be last week's low at 1.1065. Note that this threshold is roughly in line with the current positioning of the 100-day moving average at 1.1062, which greatly reinforces its importance.

In the event of a break below this key threshold, we could therefore expect a southbound acceleration. In this case, the major psychological threshold of 1.10 will be the first potential target, before the 29 November trough at 1.0980, and the October trough at 1.0880.

Lastly, to complete these technical observations, here is Danske Bank's outlook regarding the medium to long term outlook for the pair:

"Although we have recently raised our 12-month forecast to 1.15, we still believe that the lack of a rate hike outlook should limit the upward movement of the EUR/USD, i.e. the ECB is essentially a constant in the factors influencing the forex at the moment. We therefore expect the pair to continue to trade around 1.11 on a 1 to 3-month horizon."

Hourly EUR/USD chart

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



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