EUR/USD was under pressure as stock markets tanked and Draghi did not provide a helping hand. What’s next? GDP figures stand out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.
The crash of stock markets on Monday set the tone for the rest of the week, with the euro rising and falling on the fortunes of Wall Street. ECB President Mario Draghi said that he could not declare victory on inflation, keeping the pressure on the single currency. Services PMIs continue looking good, and so do most other economic indicators. In the US, the good news continued with a strong ISM Non-Manufacturing PMI.
EUR/USD daily chart with support and resistance lines on it. Click to enlarge:
:* All times are GMT
EUR/USD Technical Analysis
Euro/dollar started the week capped by the 1.2490 level mentioned last week. It then slipped and collapsed.
Technical lines from top to bottom:
1.2537 is the peak in late January 2018 that didn’t hold for a long time. 1.2450 was a temporary cap for the pair in January 2018.
1.2350 provided support to the pair in early February and now switches to resistance. 1.22 is a round number and also a level of comfort in February.
The 2017 peak of 1.2090 remains essential. 1.20 is the obvious round level and also worked as resistance in September.
1.1950 was the high level seen in November and a stepping stone towards 1.20. 1.1860 capped the pair in August and in October while working as support in September.
I remain bearish on EUR/USD
The risk-off sentiment is likely to continue, with further volatility and drops in stock markets. While the euro may weather the storm better than some of its peers, the weight is quite substantial. After stock markets calm, the common currency has plenty of reasons to rise, but winter is not over yet.
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