EURUSD – Euro Struggle Continues, Opens Bearish In 2017
Aayush Jindal
EURUSD – Euro Struggle Continues, Opens Bearish In 2017
Key Highlights
The Euro after trading as high as 1.0652 against the US Dollar declined sharply.
The EURUSD pair broke a major bullish trend line at 1.0510 formed on the hourly chart.
It looks like the pair opened the New Year with a bearish bias, and may decline further.
Today, the Germany consumer price index (preliminary reading) will be released by the Statistisches Bundesamt Deutschland, which is forecasted to rise 1.5% in Dec 2016.
EURUSD Technical Analysis
The Euro was looking to end 2016 on a positive note against the US Dollar, but failed. The EURUSD pair faced resistance near 1.0650 and declined below 1.0500. It looks like more losses may follow.During the downside move, the pair broke the 50% Fib retracement level of the last wave from the 1.0372 low to 1.06525 high. Moreover, there was a major bullish trend line at 1.0510 formed on the hourly chart, which was broken.It looks like the Euro sellers are in control, and may push the pair further lower. On the upside, the broken support at 1.0500 may now act as a resistance and prevent a recovery. The hourly RSI has settled below the 50 level, suggesting a bearish bias in EURUSD below 1.0500-20. The next major support on the downside is at 1.0440.
Germany CPI
Today in the Euro Zone, there are a couple of important releases. One of them is the Germany consumer price index, which measures the average price change for all goods and services purchased by households for consumption purpose. The market is aligned for a rise of 1.5% in Dec 2016 (preliminary reading), compared with the same month a year ago.In terms of the monthly change, the CPI is forecasted to increase by 0.6%. If the result is positive, there are chances that the Euro may bounce back towards 1.0500 against the US Dollar.
US Manufacturing PMI
In the US today, the Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector will be released by the Markit Economics.The market is aligned for no change in the PMI from 54.2 in Dec 2016. The result may have a short-term impact on the greenback as usual.
During the downside move, the pair broke the 50% Fib retracement level of the last wave from the 1.0372 low to 1.06525 high. Moreover, there was a major bullish trend line at 1.0510 formed on the hourly chart, which was broken.It looks like the Euro sellers are in control, and may push the pair further lower. On the upside, the broken support at 1.0500 may now act as a resistance and prevent a recovery. The hourly RSI has settled below the 50 level, suggesting a bearish bias in EURUSD below 1.0500-20. The next major support on the downside is at 1.0440.