EURUSD Price Action Not Convincing, Further Downside Likely
EURUSD Price, Analysis and Chart:
EURUSD Bounce Fueled by US Dollar Slippage
After touching a low just above 1.1255 on Tuesday, the lowest level since mid-November, EURUSD has rallied back to around 1.1320, making a third higher high in a row. The pair are currently being moved around by the US dollar, although EU and German data on Thursday will likely take over the wheel and steer the pair going into the end of the week.
German q/q GDP is released early Thursday morning and is expected to show growth of a miserly 0.1% in Q4, although some in the market are speculating that the reading may be flat for the quarter. German Q3 GDP rocked the market at -0.2% and 2019 German growth is now expected to be just 1%, down from expectations around 1.7% late last year. A slowing global economy, ongoing gloom in the auto industry and fears that a hard Brexit will impact German exporters hard have all added to the slowdown and will likely remain so over the coming months.
IG Client Sentiment data currently shows retail are 70.4% net-long EURUSD, a bearish contrarian indicator. However, the combination of current sentiment and recent changes gives us a mixed EURUSD trading bias.
EURUSD remains negative overall, trading well below all three moving averages and just above the 1.1300 area that seems to currently be stemming further losses. If we break and close below 1.1215, a level last seen in June 2017, further losses are likely. Option expires at 1.1350/5 and 1.1375 may also cap upside movement in the short-term. One caveat – the 1.1300 barrier continues to produce reversals with talk that central banks are active around this level. However, a resurgent US dollar and weak data on Thursday may test these buyers resolve and finally see the single currency break lower.
EURUSD Daily Price Chart (May 2018 – February 13, 2019)
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 email@example.com or via Twitter @nickcawley1.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.