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EURUSD Price Forecast - Euro Sellers Taking Back Control

EURUSD Price Forecast - Euro Sellers Taking Back Control

Nick Cawley, Strategist

EURUSD – The Main Market Points and Analysis

- German politics coming to a head shortly and Chancellor Merkel is under pressure.

- US-EU trade wars likely to get worse with the Automobile industry under fire.

- EURUSD looking at fresh multi-month lows. As latest rebound fails.

The latest IG Client Sentiment Indicator shows retail are 56.6% long EURUSD but recent positional changes give us a mixed trading bias.

EURUSD Rattled by Fundamentals while Technical’s Look Weak

EURUSD recent rally is being eroded by the ramping up of political tensions across the EU. Ongoing trade wars between the US and EU are unlikely to end anytime soon, and indeed are expected to be ramped up as national interests prevail - with the German automobile industry in the crosshairs - while German Chancellor Angela Merkel’s government is under threat as the migrant issue continues to divide opinion between the coalition partners. The three coalition parties have yet to find common ground on the issue and the fear is that if no solution is found shortly, the already shaky coalition may fail and bring down Chancellor Merkel with it.

The last ECB meeting also confirmed that rates in the single-block will remain low-for-longer with no rate hikes expected until at least Q3 2019.

EURUSD currently trades at 1.16650 and looks likely to test the downside. The pair fell back after hitting resistance around the 1.17200 in the last two sessions and are set to test support between 1.15540 and the June 21 low at 1.15080. Below here Fibonacci retracement cuts in at 1.1448 before a support zone between 1.1187 and 1.1108. The upside sees moving average resistance at 1.16840, Fibonacci retracement at 1.1710 and the 50-day ma at 1.17555.

EURUSD Daily Price Chart (July 2017 – June 27, 2018)

EURUSD Price Forecast - Euro Sellers Taking Back Control

If you are new to foreign exchange, or if you would like to update your knowledge base, download our New to FX Guide and our Traits of Successful Traders to help you on your journey.

What’s your opinion on the EURUSD and the latest trade spat? Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at Nicholas.cawley@ig.com or via Twitter @nickcawley1

--- Written by Nick Cawley, Analyst

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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