EURUSD Price: Rally Running out of Steam Despite USD Weakness
- EURUSD chart resistance coming into play
- US 3Q GDP and Eurozone Consumer Confidence readings out later.
EURUSD Slips Lower Going into the Festive Break:
This week’s 2 cent rally in EURUSD is now fading as traders square up their books ahead of the Christmas break. The move has been fueled by a weak US dollar on fears that a recession may be looming in late 2019-early 2020. US Treasury yields have fallen lower, weakening the greenback, while the sharp sell-off in the US equity markets has seen money pulled out of the previously risk-adverse US dollar and put to work in other haven currencies and assets. The Euro has not been immune from bad news with recent hard data prints from both Germany and the single-bloc missing expectations and pointing to weak growth prospects ahead, just as the ECB bond buying program finishes.
Later today the latest US Q3 GDP reading is expected to show the American economy is still in rude health, while later the December Euro-Zone consumer reading is expected to fall further into negative territory putting further downside pressure on EURUSD.
The EURUSD 1.1300 – 1.1500 trading range in place since mid-October remains in place and should hold over the coming days as turnover fades lower. The 200-day moving average remains pointing lower and will act as a hard cap against any rally. The RSI indicator is also at ’highs’ last seen a couple of months ago and is turning lower, while the 20-day and 50-day moving average crossover at 1.1365 is the next short-term downside target.
EURUSD Daily Price Chart (March - December 21, 2018)
IG Client Sentiment Datashow investors are currently 46.9% net-long, a bullish contrarian indicator. However recent positional shifts give us a mixed trading outlook.
What is your view on EURUSD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at firstname.lastname@example.org via Twitter @nickcawley1.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.