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EURUSD Price: Bounce off Technical Support Improves Outlook

EURUSD Price: Bounce off Technical Support Improves Outlook

2019-01-29 10:30:00
Martin Essex, MSTA, Analyst
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EURUSD price, news and analysis:

  • An abundance of negative factors for the US Dollar are reducing its safe-haven attraction.
  • That could mean further gains against it by the Euro, particularly as the EURUSD chart suggests a positive technical outlook for the pair.

US Dollar outlook worsens

A host of negative factors for the US Dollar are weakening it against the Euro, suggesting further gains for the pair as risk-averse traders seek alternative havens such as the Japanese Yen and Gold.

Among the factors hitting USD are:

  • Criminal charges by the US against the Chinese telecoms company Huawei and its chief financial officer,
  • Concern that the Huawei dispute will sour relations between the two countries ahead of US-China trade talks this week,
  • An attempt by China to have the World Trade Organization block US tariffs on Chinese imports,
  • Fears that a global economic slowdown will push US interest rate hikes further into the future,
  • The cost of the partial US government shutdown that ended Friday, and
  • A series of profit warnings by US companies.

These are all boosting EURUSD, which is bouncing off trendline support.

EURUSD Price Chart, Daily Timeframe (August 3, 2018 – January 29, 2019)

Latest EURUSD price chart.

Chart by IG (You can click on it for a larger image)

As the chart above shows, EURUSD has now risen for four successive days and could climb further towards channel resistance around 1.1525 and even to further trendline resistance around 1.16. Meanwhile, the 20-day, 50-day and 100-day moving averages are all providing support just under the current price.

As for retail trader positioning data, recent changes in sentiment warn that the current EURUSD price trend may continue higher despite the fact that traders remain net-long.

More to read:

A Brief History of Trade Wars

Using News and Events to Trade Forex

Resources to help you trade the forex markets:

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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

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

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