Home Daily Analysis EUR/USD Technical Analysis: February 11, 2019

EUR/USD Technical Analysis: February 11, 2019

The ongoing concerns about the EU’s economic growth keep pressuring this currency pair and the EUR/USD closed the week at 1.1322. The economic growth in the EU is decelerating, the inflation is still below expectations and this situation confirms speculation that the ECB won’t hike rates until 2020. The probability of a recession in the EU is still low but developments in the union are far from encouraging. The European indexes are still under the pressure as political uncertainty and soft financial data keep denting the market’s mood. On the other side, the US policymakers think that the Fed must be patient about further policy firming and the rates could go in “either direction” in the upcoming period. The US economy remains strong but the main reason why the case for raising rates has “weakened” is the trade war, Brexit and slowing growth in Europe and China. According to the latest news, the US policymakers are preparing to resume talks with China this week, focusing on intellectual property. A lot of work is to be done in US-China trade talks but this is certainly a positive sign. There will not be relevant macroeconomic releases this Monday and the direction for EUR/USD remains „bearish“.

Technical analysis

The EUR/USD is trading currently very close to the current support level which stands at 1.1300. The political headlines are still the main market mover and the major trend is still bearish (downtrend). The latest news from the EU was quite discouraging, the European Central bank left its monetary policy unchanged at its latest meeting and the ECB also downgraded its 2019 growth forecasts. On this chart, I marked support and resistance levels – 1.1400 and 1.1500 represent the current resistance levels, 1.1300 is the current support level.

Recommendation: According to the technical analysis, the direction forEUR/USD remains bearish. If the price falls below 1.1300 that could be a very good opportunity for the short- term traders, short-term traders can put the stop loss at 1.1315 and take profit at 1.1270 or below. If the price jumps above 1.1400 it would probably reach the 1.1430 level very soon, the next target could be located around 1.1450.

 

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