EUR/USD has lately traded around a new multi-week low of 1.1473, showing the sustained weakness in the currency downside. The Euro weakens against the US Dollar. Its performance is largely influenced by economic indicators and market sentiments. The currency pair is battling in a narrow intraday range. This suggests very low volatility but the picture paints a rather systemic bearish bias.
On the technicals, it is a dark and stormy night on the chart for EUR/USD. Next resistance is the 20-day Simple Moving Average (SMA), currently at 1.1597. As noted previously, it has dropped below the 100-day SMA (currently standing at 1.1665). Should this crossover occur, this would be a sign of changing to a more bearish sentiment, as the 20 SMA would serve as a resistance level near 1.1511. Analysts are betting the pessimistic streak will continue. They look for a quick plunge if the duo falls under the key barrier at 1.1470.
On the upside, the 1.1470 level is of great importance as it acts as long-term static support for EUR/USD. But new market dynamics threaten the pair with deeper cuts. The Momentum indicator is clearly heading south, clearly establishing it in negative territory. The Relative Strength Index (RSI) just bounced back up to 35. At the same time, it’s still below the midline, which all but assures that bearish pressure is still ongoing.
The 200 SMA for EUR/USD is currently grinding lower at 1.1649. This trend is indicative of the much longer-term outlook, which continues to be bearish for the Euro vs. Dollar. Traders and analysts alike have their eyes on these levels as they will likely determine which way traders will be leaning in the upcoming days.
According to the latest available figures, the annual United States Producer Price Index (PPI) has decreased by 0.2%. This fall is ideal to match market expectations. In addition, early estimates from the private sector indicate that the US added about 25,000 new jobs in the month of October. All of these factors will help to add to the bullish outlook for the US Dollar, making matters twice as difficult for EUR/USD.