Euro stays vulnerable

Intermediate
  • The Euro remains vulnerable, particularly versus the US Dollar, with recent rebound effort fading.
  • Ongoing concerns regarding a global economic slowdown are intensifying, with signals from the European Central Bank that a still more dovish approach to monetary policy could be seen in 2019.
  • Although the Federal Reserve in the US have also shifted to more dovish, given global economic worries, the US Dollar remains a safe haven of choice.
  • This leaves the EURUSD Forex rate vulnerable, see below.

EURUSD downside bias

A fading rebound Monday after the Friday bounce, capped by 1.1341 resistance after an initial push lower Friday below 1.1256/47 supports to 1.1233, sustaining negative forces from last week’s failure from the 1.1341/60 resistance area and the breaks below the previous key 1.1268/62 support area, keeping risks lower for Tuesday.

We see an intermediate-term range theme as 1.1214 to 1.1570, BUT with risks for an intermediate-term bear shift below the lower level.

For Today:

  • We see a downside bias for 1.1281; break here aims for 1.1233, maybe the key 1214 support.
  • But above 1.1341 targets 1.1360 and maybe aims for 1.1402.

Intermediate-term Range Breakout Parameters: Range seen as 1.1268/62 to 1.1570.

  • Upside Risks: Above 1.1570 sets a bull trend to aim for 1.1621, 1.1815 and 1.2000.
  • Downside Risks: Below 1.1268/62 sees a bear trend to target 1.1119, 1.1000 and 108.39.

4 Hour EURUSD Chart

 eurusd chart


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Current Market Analysis
Euro breaks down, GBPCAD threatens upside

US Dollar Index holds support and rebounds EURUSD seeds multiple negative signals, downside risks GBPUSD sends buy signal GBPCAD sets up more bullish AUDUSD negative and USDCAD buy signal USDTRY and USDBRL surge

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