The EUR/USD currency pair has been making big moves as well, recently rebounding modestly after testing the important 1.1600 level. The euro’s been hemorrhaging for a third consecutive day. This unfortunate trend away from the dollar is cause for concern. At the time of writing, EUR/USD is dealing around 1.1630, definitely showing an intra-day fall.
With that backdrop, the risk of a further downward extension for EUR/USD has increased against a wave of bad news. As seen in the chart above, the 20 Simple Moving Average (SMA) has crossed below longer-term averages, indicating a strong bearish path. This SMA is still on a rather shallow downward trajectory, though remaining comfortably above today’s trading action. This trend may mean more short-term bearish patterns ahead.
Even with the help of some relief from in exceedingly oversold conditions, EUR/USD still has a tough time staying above a mildly bullish 100 SMA. No wonder then that many are worried that this recovery is anything but stable or lasting. Even the technical indicators for the pair are losing their upward momentum. On top of that, they sit deep under their midlines, further complicating the outlook.
The currency pair’s technical resistance and support levels are stacking up against it. Important support comes in at 1.1590, 1.1550, and 1.1510, with important resistance seen at 1.1665, 1.1710, and 1.1745. The two need to stay above these important ruby-red lines. This will be key in determining the long-term trajectory of this policy.
These are some of the external factors that are driving the euro further down. Recent French crisis of deficit that goes on to keep quarrelling demand for the EUR’s, irresistibly empowers the EUR against the dollar. Imagine all this—and more—affordably digitized and easily accessible. Market participants have mostly priced in a 25 bps cut in interest rates, which adds to the uncertainty about the euro’s strength.
European Central Bank President Christine Lagarde at an academic confab in Italy. This year, she is giving her keynote through a pre-recorded video intended for the Luxembourg Chamber of Commerce. Her comments should provide useful clues as to which way the ECB’s monetary policy is heading. They’d have the ability to influence market sentiment about the EUR/USD pair.
Repeated calls for new concessions from the United States would put recent trade agreements with four other partners at risk. This stagnation would likely increase pressure on the euro’s exchange value with the American dollar. The trajectory of these events poses further dangers to both financial stability and miraculous growth before the dawn’s early light in the Eurozone.