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#1 20-01-2020 10:20:01

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: the pair maintains a bearish profile, but...

EUR/USD: the pair maintains a bearish profile, but uncertainty could set in ahead of Thursday's ECB meeting


The EUR/USD's chart profile remains negative today after a sharp drop last Thursday and Friday against an economic calendar that largely favoured the dollar, mechanically dragging the EUR/USD into a correction.

Looking ahead to Thursday, don't forget that weekly Unemployment Claims, Philly Fed Index and Retail Sales came out above the general consensus. On Friday, it was housing starts and consumer confidence according to the Conference Board that led investors to push the dollar up even further.

Today, we won't have to rely on the economic calendar to liven up trading, even though the only important statistic of the day has already been released this morning. The German PPI for December came out at 0.1% versus 0.2% expected.

Given that no more important EUR/USD statistics will be released today, it is possible that investors will largely defer their attention to technical factors.

In this area, the first thing to remember is that the EUR is currently testing the immediate resistance level at 1.11. Confirmation of a return above this threshold would be an encouraging signal, but one would need to be able to observe a crossing above the 200-day moving average at 1.1135 to be able to position oneself for buying other than in the very short term.

If this happens, we will first watch last week's peak at 1.1169, before the round threshold of 1.12, then the end-of-year peak at 1.1239, and the psychological threshold of 1.13. On the downside, last week's low of 1.1084 will be the first potential support level to be taken into account, ahead of the 100-day moving average at 1.1059, followed by the major psychological threshold of 1.10.

Lastly, remembered that the ECB will be holding its first meeting of the year 2020 in 3 days, and although this should prove to be a non-event according to analysts, traders may want to be cautious, and not overly committed in one direction or another on the EUR/USD pair prior to this event, which argues for an uncertain near-term development.

Currently, the EUR/USD is trading at 1.1087 on the forex.

Daily EUR/USD chart

http://www.forex-central.net/forum/userimages/EURUSD-D1.png



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