EURUSD – Technical Analysis
- 1 EURUSD – Technical Analysis
- 1.1 Introduction
- 1.2 Fundamentals
- 1.3 Technical
- 1.4 Conclusion
Of all the major currencies paired against the USD, the EUR has been finding it difficult holding its support level on the higher time horizons. Join us as we take a look at major fundamental and technical events driving the foreign exchange of the EURUSD.
European Monetary Union: Industrial Production
Eurostat is scheduled to publish the result for the Industrial Production on Wednesday 13 March ’19. This indicator is a representation of the production volume of factories and manufacturing industries.
An uptrend is viewed as inflationary which may predict an increase in interest rates.
High growth in industrial production is often perceived as a positive sentiment for the EUR as the consensus at press time was at 1.0% as opposed to the last reading of
-0.9%. A low reading of industrial production is considered bearish for the EUR.
European Monetary Union: Consumer Price Index
Eurostat will on Friday 16th March ’19, release the CPI results for the Euro Zone. The CPI fundamental indicator captures variations in the price of goods and services and a meaningful way of measuring the purchasing trends and inflation in the Euro Zone. Usually, the reading if high is considered hawkish and a bullish EUR, while a low value is regarded as bearish. The previous CPI reading is at -0.1% compared to the 0.3% for consensus, implying positive sentiment towards the EUR.
Michigan Consumer Sentiment Index
This survey reveals the personal consumer confidence in economic activity, showing the willingness of consumers towards spending money. The actual results are scheduled for release on Friday, March 15 ’19.
A higher than expected actual released value is considered bullish for the USD. A lower value, on the other hand, is considered bearish. The consensus is at 93.0 which is considered a bearish sentiment as predicted to be lower than the previous reading of 93.8.
EURUSD: Monthly Charts
Carrying out a top-down analysis, we start with the monthly chart. The pair entered into a bearish trend, beginning with a breakdown of a hidden bullish accumulation on 02 April ’18. This has so far sent the foreign exchange tumbling down by 7.45%, with resistance at 1.25557. A candle pattern in the form of a bearish accumulation emphasized the presence of bears in the market, setting up a second entry point on 01 June ’18 with resistance at 1.18562.
The pair’s bearish momentum began to slow down after the formation of a bullish accumulation on 03 December ’18. All hope for a strong recovery for the EUR ended after an opposite bearish accumulation pattern was triggered on 01 February ’19. The bears finally took over as the current month already declined by 1.63%.
EURUSD: Weekly Chart
The price from a weekly chart failed to close beyond the 1.15001 resistance of the double bearish accumulation form on 29 Oct – 05 Nov ’18. Again, looking above, you’ll notice that the only significant setup for a bullish trend was formed on 24 December ’18, which also failed to a price breakdown on 04 February ’19. This failure was confirmed by price closing below the 1.13428 support.
Later on 25 February ’19, the bulls made an attempt towards a price increase by signaling a bullish accumulation. The bullish pressure collapsed on 04 March ’19 as price closed below the 1.13288 support.
EURUSD: Daily Chart
A bearish price decline as shown above started with price closing below the critical support level of 1.14110 on 05 February ’19, with price making a 1.45% price decline. On 04 March ’19, a similar failure of critical support of 1.13162 was initialized with a combination of bearish accumulation on 06 March ’19. This resulted in a sound increase in bearish volatility as price declined by 1.13%.
EURUSD: 4HR Chart
A confluence of signals is triggered in the form of a bearish regular divergence and bearish accumulation on 28 February ’19 18:00. This sent the price south by 0.7%, and another 0.74% following another breakdown of bullish accumulation on 07 Mar ’19 10:00. An update to the breakout of the bearish accumulation triggered on 08 March ’19 02:00 is illustrated below.
Although the pair is in a long term bearish trend on the higher weekly and monthly charts, we should expect a short term bullish trend as price triggers a breakout of bullish accumulation on the 4hour chart as shown on the update below. You may want to take trades on Binary Cent platform by visiting the review section of our website.