For the third consecutive day, the EUR/USD currency pair has dropped right now. Analysts predict this trend will continue. On Tuesday, as the American session got underway, the pair was once again testing that critical 1.1600 support line. The international currency market has clearly signaled for a stronger USD. This alteration is making a huge impact on the EUR/USD currency pair.
This negative sentiment affecting the EUR/USD pair is based on a few different reasons. The USD’s fortified stature can be mostly given credit to relaxing trade hostilities between the United States and China. These advancements have strengthened confidence in the US economy, bringing the USD higher against its European parallel.
The 100 Simple Moving Average (SMA) is today at around 1.1650, while the 20 SMA is now above it. At the same time, the 20 SMA has just experienced a bearish cross, suggesting a reversal in bullish sentiment in the market. The intersection of these two averages around 1.1650 makes for a significant resistance level for the pair.
As traders look ahead to gauge the most likely support and resistance, analysts have pointed out key technical levels for EUR/USD. First strongest support seizes at 1.1590, 1.1540, and then 1.1510. Conversely, resistance levels are noted at 1.1650, 1.1690, and 1.1740. With these new market dynamics in play, the recent EUR/USD bullish run faces an uphill battle. It has a hard time testing up in resistance areas while nearing major support.
The uncertainty of the current US government shutdown compounds these challenges. Unlike other recent shutdowns, it has already furloughed thousands of federal workers and laid off many more. The deepening political stalemate casts a shadow on the fragile US economic recovery. Traders are on edge, fully aware that this could have serious implications for future movements of the EUR/USD pair.