EUR/USD: The trend remains bearish, the opportunity of sale in case of rebound

© O Financista.

By David Wagner

The pair EUR/USD posted last week, its second consecutive week of sharp decline, and the 6th week of decline out of the 7 that have passed since the beginning of the year. The Euro-Dollar has marked a low at 1.0826 Friday, the lowest since the month of April 2017.

Another count is that a testament to the power of the bearish view on the Euro shows that the EUR/USD was signed on Friday, the 9th day of decline over the past 10 trading sessions, knowing that the only day of the rise of the series has only been anecdotal.

At the root of this downward movement, there are several statistics US major, which benefited the US Dollar, but also concerns about growth in Europe, while the chinese economy will no doubt be heavily affected by the coronavirus, and that Europe is much more exposed to China than the United States.

In the short term, the EUR/USD however, seems to stabilize not far from its low of last week on Monday, the opportunity to ask if his next move most likely will be a continuation of the decline, or rather a rebound.

At first sight, the extended character of the decline suggests a possible rebound, partly helped by profit-taking on the part of sellers, however, it is to be observed significant gains, for example above the psychological threshold of 1.09, to begin to feel that the negative bias decreases.

It should be noted, moreover, that in a note published over the weekend, the bank UBS is planning for this week a bounce to 1.09, but recommends to position itself again at the sale from this threshold.

Above, the next significant obstacle will be the psychological threshold key 1.10, the break would ease a more bearish view, and would consider buying positions more sustainable. In this case, the moving average 100 days currently 1.1053 will be the first important objective.

Has the downside, a break under the lows of the last week would expose the psychological level of 1.08.

Finally, it should be noted that it is in the final without a doubt, the economic calendar is loaded this week who will have the last word in regards to the evolution of the EUR/USD.

To mention only the most important events, we will discuss the Zew index of economic sentiment in Germany and the index of the Fed of New York tomorrow, building permits in the US and in the minutes of the Fed Wednesday, the minutes of the ECB and the index of the Philadelphia Fed on Thursday, finishing on Friday with a PMI preliminary of February in Europe and in the USA.

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