The plunge of the EUR/USD is increasing while the signals bearish accumulate

© O Financista.

After you have completed the year 2019 by 4 consecutive days of increase and a peak at 1.1240 31 December, the highest since the month of August, the EUR/USD pair has started off the year 2020 in a sharp decline yesterday, and has ramped up its fall today.

The Euro-Dollar has in fact marked a low daily to 1.1131 for the time being this Friday, cancelling more than half of its year-end rally.

From a fundamental point of view, the acceleration of the decline of the Euro appears to be mainly related to two factors this Friday, with disappointing figures concerning German unemployment, which is likely to further degradation of the first economy of Europe, which has already narrowly avoided recession in 2019.

The other factor involved is the feeling of aversion to the risk generalized, in a context of rising tension between Iran and the USA after the assassination by the U.S. army, a top military commander in iran, after which Iran has promised to retaliate.

Technical signals to take into account, and thresholds to monitor on EUR/USD

From a graphical point of view, the signals downside is many since yesterday :

  • Break below the psychological threshold of 1.12
  • A break below the moving average 100 hours (currently at 1.1180)
  • A break below the 200-day moving average (currently at 1.1141)
  • A break below the moving average 200 hours (currently at 1.1138)

At this stage, the next downside potential are about :

  • The psychological threshold of 1.11
  • The moving average 100 days (currently at 1.1061)
  • The low of December 20th at 1.1065
  • The psychological threshold of major 1.10
  • The hollow of the 29 November at 1.0980.

Finally, in the case of Euro rebound, we will take into account potential obstacles the following :

  • The 200-day moving average 1.1141
  • The psychological threshold of 1.12
  • The top of the 31 December to 1.1240

A monitor in the economic calendar for the rest of the day

In addition to any new statements from Iran or the USA about the recent escalation of tension, the traders will closely watch the publication of the ISM manufacturing index US to 16h. The consensus of economists anticipates a rise to 49 points, after 48.1 points in the previous month.

Later in the evening at 20h, we will wait for the Minutes of the last meeting of the Fed, although they are not expected to bring any new information given the fact that the Fed has been very clear about its intention not to change its rate for the moment.

Like this post? Please share to your friends:
Leave a Reply