A quiet start to the week for EUR/USD as sellers stay in control
Despite plenty of recent commentary about the dollar potentially suffering a demise on the back of the Fed pausing its rate hike cycle and the US economy suffering as a result of the US-China trade dispute, the greenback is holding firm against the euro with the latter having worse problems to deal with currently.
Recently, German economic data has been abysmal to say the least and early signals from PMI surveys indicate that the economy is also experiencing a slow start to the year. Add to the fact that German yields are seen declining further and money markets are pricing in less chance of an ECB rate hike, it’s tough to find reasons for the euro rally strongly against the dollar.
Even from a technical perspective, sellers in EUR/USD remain in control as the downside momentum holds firm. Price is yet to break away from the downwards trendline and that will continue to keep putting pressure on the pair towards the 1.1300 handle.
For buyers, breaking that trendline will only be the first step as further resistance is seen around 1.1350 followed by the 100-hour MA (red line) @ 1.1361. The latter is key for buyers to break above in order to put an end to the near-term downside momentum.
Looking ahead, there isn’t much on the calendar that will help to influence traders today so it’s all about watching for the technical levels for the time being. The downwards trendline will be the key level to watch out for in any potential return back to the upside while support and bids around 1.1300-10 will be the key area sellers will be eyeing to break below.