EUR/USD currency pair, which has been languishing in a bear market. Immediate trends in moving averages and momentum indicators confirm strong downside pressure. 20-day Simple Moving Average (SMA) as of today is 1.1595, with the 100-day SMA at a sideways directionless 1.1665. The lengthier 200-day SMA is still climbing at 1.1335. That means the pair is hitting some structural headwinds to its rise.
Intra day during European trading hours, EUR/USD was able to clip a minor bounce, peaking at 1.1530. Despite this uptick, the pair continues to be capped beneath both the 20- and 100-day SMAs, indicating that sustained upward momentum is lacking. Analysts think that a corrective advance could see the pair moving toward the 1.1600 level. That said, the mood still seems to be pretty bearish.
Recent readings from the momentum indicator for EUR/USD have maintained a bullish reversal. That has a bit recently flattened and established itself into neutral territory. That might point to a short-term reprieve rather than a strong, upward trend reversal. Figure 1 EURUSD daily chart depicting a bearish scenario. The 20-day SMA continues to fall, crossing under the longer-term 100-day average.
That negative sentiment is only getting worse. At the same time, the Relative Strength Index (RSI) for EUR/USD is moving higher, overtaking the 50 mid-line and reaching 53.97. This increase is a positive sign to suggest that buyers are indeed becoming more powerful, though they continue to face major challenges in their path.
In October U.S.-based employers announced 153,074 planned job cuts. Moreover, these layoffs are likely to further economic stability and consumer confidence. These numbers have the potential to move the currency market, which only adds to the uncertainty of the EUR/USD currency pair.