EUR/USD Price Analysis: Seems vulnerable below mid-1.0500s amid bullish USD


  • EUR/USD consolidates in a narrow trading band through the Asian session on Thursday.
  • The fundamental backdrop and the technical setup support prospects for further losses.
  • A convincing breakout through the descending channel hurdle will negate the bearish bias.

The EUR/USD pair struggles to gain any meaningful traction on Thursday and oscillates in a narrow band below mid-1.0500s through the Asian session. The fundamental backdrop, meanwhile, seems tilted in favour of bearish traders and suggests that the path of least resistance for spot prices is to the downside.

Growing acceptance that the Federal Reserve (Fed) will hold rates higher for longer in the wake of a resilient US economy and to bring inflation back to its 2% target push the benchmark 10-year Treasury yield to a fresh 16-year peak. This, along with the risk of an escalation in war between Hamas and Israel, continues to underpin the US Dollar (USD). Apart from this, speculations that further rate hikes by the European Central Bank (ECB) may be off the table validate the negative outlook for the EUR/USD pair.

Even from a technical perspective, the recent failures near the top boundary of a downward-sloping channel extending from a 17-month peak touched in June point to a well-established short-term bearish trend. Moreover, oscillators on the daily chart, though have been recovering from lower levels, are still holding in the negative territory. This, in turn, supports prospects for an extension of this week's downfall from the vicinity of the 1.0600 mark and a further depreciating move for the EUR/USD pair.

Hence, a slide back towards retesting the weekly low, around the 1.0500 psychological mark, looks like a distinct possibility. Some follow-through selling will be seen as a fresh trigger for bearish traders and drag the EUR/USD pair back to the YTD trough, around the 1.0450-1.0445 region touched earlier this month.

On the flip side, the 1.0600 mark, which now coincides with the descending trend-channel resistance, should continue to act as an immediate strong barrier. A convincing breakout should allow the EUR/USD pair to surpass the monthly peak, around the 1.0635 region and aim to reclaim the the1.0700 mark, representing the 50-day Simple Moving Average (SMA). The latter should act as a key pivotal point, which if cleared decisively will suggest that spot prices have formed a near-term bottom and pave the way for additional gains. 

EUR/USD daily chart

fxsoriginal

Technical levels to watch

EUR/USD

Overview
Today last price 1.0537
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.0537
 
Trends
Daily SMA20 1.056
Daily SMA50 1.0705
Daily SMA100 1.0829
Daily SMA200 1.0822
 
Levels
Previous Daily High 1.0594
Previous Daily Low 1.0523
Previous Weekly High 1.064
Previous Weekly Low 1.0496
Previous Monthly High 1.0882
Previous Monthly Low 1.0488
Daily Fibonacci 38.2% 1.055
Daily Fibonacci 61.8% 1.0567
Daily Pivot Point S1 1.0509
Daily Pivot Point S2 1.048
Daily Pivot Point S3 1.0438
Daily Pivot Point R1 1.058
Daily Pivot Point R2 1.0622
Daily Pivot Point R3 1.065

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD treads water just above 1.0400 post-US data

EUR/USD treads water just above 1.0400 post-US data

Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.

EUR/USD News
GBP/USD remains depressed near 1.2520 on stronger Dollar

GBP/USD remains depressed near 1.2520 on stronger Dollar

Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.

GBP/USD News
Gold keeps the bid bias unchanged near $2,700

Gold keeps the bid bias unchanged near $2,700

Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.

Gold News
Geopolitics back on the radar

Geopolitics back on the radar

Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.

Read more
Eurozone PMI sounds the alarm about growth once more

Eurozone PMI sounds the alarm about growth once more

The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures