EUR/USD kicked off the month of November on a bearish note, looking to test the important 1.1500 level again on Monday. The pair is under serious pressure and has already fallen to fresh three-month lows. Long-lasting global demand for the US Dollar (USD) is disproportionately hitting the Euro right now. If analysts are to be believed, the bearish momentum will continue indefinitely. To the downside, they’re currently testing an important long-term support level at 1.1470.
With the Euro under great stress, the market fundamentals were tipped in favor of the USD. The dollar’s unexpected strength is upending what should have been a clear bullish trend for EUR/USD. It has yet to overcome the 20 Simple Moving Average (SMA) since then, which now sits at 1.1567. This failure to recover leaves a bearish bias likely to dominate the short term.
Technical analysis paints a pretty grim picture – at least for the bulls out there – so let’s get into it. The 20 SMA has now moved south under the longer-term moving averages, which is a sign of current bearish momentum. The 100 SMA is bearish right now and is above the 20 SMA at 1.1616. At the same time, the 200 SMA is sloping downward, at 1.1664 now. All together, these indicators suggest there just hasn’t been the bullish support needed for a reversal.
Additionally, the EUR/USD Momentum indicator is deeply entrenched in negative territory, providing further evidence of the currency pair’s struggles. Meanwhile, the RSI (Relative Strength Index) is moving lower at 35.8, which affirms the current bearish sentiment. With both fundamental and technical indicators setting themselves up against another potential recovery effort, traders should continue to be wary.
Market analysts warn that EUR/USD must first clear the resistance levels of 1.1567 and 1.1616. Doing so could potentially reverse the prevailing bearish pressure on this currency pair. Until such a breakthrough happens, bears are going to keep fighting for lower levels.