Technical Analysis

EUR/USD sellers look to extend near-term downside move, what’s next?

EUR/USD sellers aiming for a move below 1.1400

ForexLive

Sellers are back in near-term control after breaking back below the 200-hour MA (blue line) in trading yesterday and defended the level during US trading as well. Of note, price is slowly moving away from the key defining near-term level as sellers are aiming for a move back below the 1.1400 handle currently.

There’s minor support @ 1.1390 from the 28 January low nearby so that will help to act as a another layer of defense alongside the 1.1400 handle for buyers. That said, it’s worth noting that EUR/USD has been trending in cycles between 1.13 and 1.15 for the longest of time now.

Economic conditions in the Eurozone will do little to aid the single currency in a move higher and there’s nothing in the fundamental picture that I can see for the euro to pull back to the upside for now. As it stands, the pair hinges more on dollar and risk sentiment more than anything.

Given that trade talks are seen in limbo up until next week, the greenback should still remain supported on that front. Now we’re just left with US economic data. Today, we’ll get the delayed trade balance data from November (due to the government shutdown). It’s not something that’s going to rattle markets on the day so in light of that, I would expect sellers to still prevail in EUR/USD in the near-term.

A move back below 1.1390 will exacerbate further weakness in the pair but in all likelihood, today is going to be a slow and sluggish day as traders do battle around 1.1400 unless we get some other headlines to shake things up.

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