EUR/USD Daily Price Forecast – The Fiber Bears Remaining Under Control

The EUR/USD continued its last week’s downtrend around 1.1245 levels. On Monday morning, the pair reached 1.1227 support level. This level has acted as a very strong support level. The EUR/USD has bounced back multiple times in the past.

On Friday, the President of the US increased the previous tariff on $200bn worth of Chinese goods to 25%. Over this move, China has said that they will surely retaliate. Today, Donald Trump commented over the Chinese stance, that the US is “right where we want to be with China”. His statement portrayed a deadlock situation of the US-China trade dispute. This growing concerns around the trade war seem to continue pressurizing the market sentiment, hence the Fiber.

The US Dollar Index that calculates the Greenback against the six significant rivals stays on recovery mode. The Index had dropped several pips on Friday amid poor April CPI scores. The Greenback made a downfall from 97.35 levels, straight to 97.14 levels following the US CPI data. This weakness in the USD had benefitted the Fiber on that day. Now that Index is on the recovery path, then there is evident downward pressure on the EUR/USD pair.

EUR/USD Influencing Events

Today, there are no significant events which would make EUR increase/decrease. Although, few US events have lined up for the day and may have a slight (or no) directional impact on the pair.

USD Specific Events

13:10 GMT

The President of Federal Reserve Bank of Boston, Eric Rosengren, will speak about, Finding “Policy Space” in a Low-Rate World. And, the Vice Chair of the Board of Governors of the Fed will give his opinion about the Monetary Policy. Both these executives would express their views on the US economy.

Technical Analysis

1-Hour Chart

The sound 1.1253 resistance levels restrained the EUR/USD pair from moving upwards. This strong resistance has already proved its strength in the previous week. The Fiber was following a downtrend pattern and was drifting in the lower Bollinger Band. This position of the pair signals for a negative outlook for the pair. Investors remain intact over hopes that the bulls will anytime show powers after they noted the Simple Moving Averages (SMA). The pair was hovering above the 50-days SMA, 100-days SMA, and 200-days SMA, alluding an uptrend. There was a narrower width observed with the Bollinger Bands showing low volatility at the last moment. However, the market expects the Bands to expand, helping the pair breach above the 1.1253 levels.

Notably, the EUR/USD pair had shown some rebounds from the 61.80% Fibonacci Retracement levels. The bounces had made the pair reach in the upper section near 23.6% Fibo standards. The pair remains supported on the back of that level near 1.1230 levels. The Relative Strength Index (RSI) indicated around 50 levels, showing neutral investor interest.

1-Day Chart

When looked on a slightly longer term scale, the picture looks quite bearish. The pair was hovering near 1.2400 levels in the previous March. Now, the value has reduced 10.39% reaching around 1.1220 levels. The significant 200-days SMA was taking rounds above the EUR/USD pair revealing strong future downtrend signals. Also, some can think of this situation as a buying opportunity at this reduced trading value.