In the forex market, the EUR/USD currency pair opened the week trading flat near the 1.1600 level on Monday. Though the picture looks positive for the bullish, bearish signals point to the pair’s potential for further downside. Adding to the current market environment, particularly with major U.S. economic data releases on the horizon, might increase volatility in the exchange rate.
Currently, the 20-day Simple Moving Average (SMA) for the EUR/USD currency pair is moving downwards. It has spent the past week and a half just under that trading price, at 1.1582. Overall, this development is a promising sign of deeper support that might be further tapped and tested in the near term. Should the pair break below this SMA level, it would expose a steeper decline, triggering fears among traders.
The 100-day SMA has edged lower to 1.1661. That trend is now cutting off any further progress upward for the duo. The 200-day SMA is angled up, currently at 1.1379. The implication is that while there may be downside risk, it seems to be constrained in the larger scheme of things.
The technical picture for the EUR/USD continues to look bearish as most indicators show diminishing buying pressure. Completing the picture, the 20-period SMA and the 200-period SMA have come together just above current price. This forms a ceiling around 1.1610 which would complicate short-term recovery prospects.
At the moment, the 100 SMA remains perfectly horizontal just below current price around 1.1577. Further, the Momentum indicator has dropped below its own midline, signaling a loss of bullish momentum. The Relative Strength Index (RSI) now resides at 47.2 and still points downwards, affirming weakened bull pressure from traders.
Analysts expect that the delayed release of U.S. economic data could cause the biggest shock to investor expectations. This data will be especially important in guiding the Federal Reserve in December’s monetary policy decision. This news is likely to ignite notable volatility in the EUR/USD currency pair. Traders will be excited to monitor its every tick.
In a recent statement, the European Commission noted an uptick in economic activity, stating, “initially due to a surge in exports ahead of anticipated tariff increases, but investment in equipment and intangible assets performed more strongly than expected.” These details could affect how traders interpret the euro’s strength against the dollar.
As the week progresses, market participants will keep a close eye on these technical indicators and economic data releases to navigate potential market movements.