EUR/USD continued struggling, tumbling out of range as the US Dollar stormed the board. What’s next? A mix of different figures awaits the common currency now. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.
Euro-zone data was mixed with an increase in inflation to 2.1% but GDP disappointed with only 0.3%. The US Dollar enjoyed several positive factors. The Federal Reserve left rates unchanged but upgraded the language on growth and inflation. In addition, the mounting trade tensions with China have also pushed the greenback higher, and so have higher yields.
EUR/USD daily chart with support and resistance lines on it. Click to enlarge:
* All times are GMT
EUR/USD Technical Analysis
Euro/dollar made another attempt to break above 1.1750 (mentioned last week). The failure to do so sent it down.
Technical lines from top to bottom:
1.2060 was the low point in late April and it is the last barrier before the round number of 1.20.
The round number of 1.19 is also notable as a pivotal line in the range and it also temporarily held the pair back in late 2017. 1.1845 was the high point in early June.
Further down, the 1.1820 level was a stubborn support line in late 2017. 1.1790 capped the pair in mid-July 1.1750 is a low point recorded in mid-May.
1.1720 is a veteran line that worked in both directions, last seen in November. 1.1676 was a temporary low point in late May.
1.1625 provided support to the pair several times in June and July. It is followed by the mid-July trough of 1.1575.
Below, 1.1510 is the 2018 low and also a ten-month trough. Further down, 1.1480 served as support back in July 2017.
I remain bearish on EUR/USD
Monetary policy divergence weighs on the pair and so do Trump’s clashes with China. Nothing material is likely to change now, allowing the pair to extend its falls.
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