EURUSD Forecast - The Path of Least Resistance Remains Lower
EURUSD News and Talking Points
- US Treasury yields slip lower but EURUSD remains weak and looks likely to move lower.
- A break below 1.15099 opens the way to further falls.
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EURUSD Continues to Weaken Despite Heighten US – China Trade Tensions
EURUSD continues to probe to the downside with the recent eleven-month low at 1.15099 within sight. Despite falling US Treasury yields - normally a prop for the greenback – and increased US-China trade war tensions, the USD is still able to make advances against a very weak EUR complex. Last week’s ECB meeting confirmed that rates in the eurozone will remain lower for longer and while the QE program will finish at the end of December it remains an important tool for the central bank and can be re-activated if necessary in the future.
In addition, German Chancellor Angela Merkel’s position is under threat from a potential split between the CDU and the CSU over immigration, while Italy’s new hard-line government has come under fire lately for not accepting a boat carrying over 600 migrants.
On the downside a beak of 1.15099 opens the way to 1.14480 – the 50% Fibonacci retracement – before a further slide down to 1.1187. On the way up, strong resistance at 1.17175. EURUSD currently trades at 1.15550
The latest IG Client Sentiment Indicator shows retail are 56.6% long EURUSD but recent positional changes give us a mixed trading bias.
EURUSD Daily Price Chart (October 2017 – June 19, 2018)
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--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.