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#1 22-01-2020 13:30:18

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Registered: 21-12-2009
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EUR/USD: euro remains under pressure after failed Tuesday rebound

EUR/USD: the euro remains under pressure after a failed rebound on Tuesday, technical signals and next targets

After a bullish start to Tuesday's European session, the markets finally confirmed the pair's bearish bias, and Wednesday morning's new lows are still pushing the nail in.

The EUR/USD pair had rallied to a high of 1.1116, as the German ZEW index was well above expectations and at its highest level in several years, and the correlation with the GBP/USD was taking off, as strong employment data was taking off, putting the prospect of BoE rate cuts out of reach.

However, the Euro then quickly reversed its gains, and after finding support at the 1.1079 level overnight, the Eurodollar pair hit a new low at 1.1075 for the time being on Wednesday.

Risk aversion in the markets regarding the risk of a pandemic linked to the new Chinese virus seems to explain the weakness of the euro, and the strength of the USD.

From a technical point of view, it is interesting to note that the 100 and 200-hour moving averages which were both around 1.1120 at the time of the Euro's rise on Tuesday clearly blocked its advance.

In addition, the 100-hour moving average broke below the 200-hour moving average, which is a classic bearish signal.

If the downtrend continues, the 100-day moving average at 1.1059 will be the first potential target, ahead of the major psychological threshold of 1.10.

In the event of a rebound, the psychological threshold of 1.11 will be the first key hurdle ahead of the 200-day moving average at 1.1129 and then the psychological threshold of 1.12.

Currently, the EUR/USD pair is trading around 1.1091 on the forex.

Hourly EUR/USD chart

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



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