© Reuters. The reversal in the downtrend of the EUR/USD is confirmed
By David Wagner
Investing.com – The pair EUR/USD starts the week with a strong fall, with a hollow at 1.1308 for the moment, after a peak at 1.1382 yesterday evening, just after a gap upward at the opening of the Forex.
The Dollar is benefiting from the perpsective of an agreement China-USA
The very sharp rebound in the Dollar, with a Dollar Index that has surpassed its highs from last week is the main reason explaining this decline in Euro-Dollar.
The greenback seems to have taken advantage of the information of the weekend according to which a trade agreement between China and the USA would be close, the Wall Street Journal even referred to the date of 27 march for the signature.
The technical factors are not foreign to the acceleration to the downside shown by the EUR/USD pair since this morning.
Two breaks important technical
The fall has clearly accelerated after a break below the moving average 200 hours, which stopait the corrections of the Euro for over a week.
In addition, the evolution of the pair EUR/USD in recent days has given rise to a configuration graph like a ” Shoulder-Head-Shoulder “, typical of the reversals down, including the ‘neck line’ has given way this morning (thus giving rise to a sell signal), in the wake of the break below the moving average 200 hours.
It was therefore able to observe at the beginning of day two technical signals bearish major, which builds on the essential context favourable to the Dollar, which helps to explain the fall of the EUR/USD this Monday.
The bearish reversal is confirmed
With more hindsight, we can now estimate that the upward trend that began following the lowest annual 2019 February 15, at 1.1233, which has culminated with the summit at 1.1419 of last week has now returned to the downside, as we suspected in our point of EUR/USD early in the morning.
The next support potential lie on the psychological threshold of 1.13, before 1.1275, 1.1250, and 1.1233, and then 1.1215 (hollow 2018).
The increase, he should be able to see a return back above 1.1360 to a minimum to that of the bearish reversal will cancel.
The next important events to watch for
Finally, it should be noted that after a economic calendar empty on Monday, the program of the future will be more loaded, with a number of indicators that are likely to influence the trade on the EUR/USD pair.
It will include the service PMI and european retail sales in the Euro Zone in the morning, before the PMI services, ISM services, and sales of new homes in the afternoon in the United States.
However, it is also necessary to consider the possibility of a consolidation phase if the traders decide after the fall of the day to sit on the sidelines until the most important events of the week, the ECB meeting of Thursday, and the report NFP this Friday.