EUR/USD Is Stepping on Thin Ice This Friday

Daily Calendar for the EUR/USD

So far, we’ve had a lot of PMIs, which generally came slightly better than expectations. We’re still waiting for words from European Central Bank (ECB) President Christine Lagarde later in the day. Despite the potential help from the PMIs, the EUR is suffering on Friday, opening speculations about a major long-term sell signal.

Technical Analysis

The main reason for our pessimism is the fact that the EURUSD is flirting with a super crucial long-term support – the lower line of a giant symmetric triangle pattern (red). A breakout of that support would mean a proper sell signal, which can bring a drop lasting for weeks or even months.

The buyers’ main task should be defending that area. The situation in the mid-term isn’t any better. We can see that the EURUSD is gradually moving lower, using trend continuation patterns like the flag (black lines) and horizontal support/resistances (orange line).

Most recently, the price bounced off a resistance at 1.094 and that will currently be the number one resistance. Only a breakout of that level can bring us a buy signal. Currently, the sentiment is negative and will stay this way as long as the pressure on the lower line of the triangle is increasing. It doesn’t look good for potential buyers at all.