Daily EUR/USD price action has been on a downward trajectory this week.

somrat4030

Well-known member

Jan-26, 2022, EUR/USD, GBP/USD technical analysis and forecast, BY Forex Forum.​


Currency trading analysis

The Euro comes under pressure via elevated Russia/Ukraine tensions which may have systemic reach throughout Europe. Russia is a major oil and gas producer and courier for countries within the EU. Should sanctions be imposed by other nations in an attempt to stave off the Russians, the EUR could deteriorate further against the greenback. The U.S. dollar is typically seen as a safe-haven currency relative to the Euro leaving further downside room for EUR/USD.

Daily EUR/USD price action has been on a downward trajectory this week leaving the 1.1300 psychological handle exposed to a break lower. This coincides with a bear flag resistance support breakout to the downside bringing into focus subsequent support targets, while a daily candle confirmation close below these aforementioned levels could prompt further downside.

Resistance levels:​


1.1400
20/50-day EMA (purple/blue)
1.1300
Support levels:

1.1186

Overall, the Euro has struggled against the British Pound and the Dollar in recent months as investors have sought a more aggressive rate hike cycle from both the Bank of England and the US Federal Reserve. While these two central banks are likely to stay ahead of the ECB, the yawn rate flaw that has affected the euro for some time will at least diminish.

The European Central Bank is likely to react to signs of increased spillover from durable to non-durable goods prices and this is an indication that inflation will continue further. Core inflation in the eurozone is rising sharply.​


According to the technical analysis of the pair: The recent move of the EUR/USD currency pair below the psychological support 1.1300 brought the bears more momentum to move further downward. It also will move closer to the targets of the current downtrend, the levels of 1.1255 and 1.1180, and the last level is important for the expectations of psychological support 1.1000. The resistance levels of 1.1485 and 1.1660 will remain the most important to cause a strong and continuous change in the general trend of the euro dollar, which is still bearish so far. The divergence in the economic performance and the future of monetary policy tightening between the United States and the eurozone will continue to pressure any gains for the euro-dollar.

On the other hand, The GBPUSD is trading in a narrow up and down range ahead of the FOMC decision later today.​

The range is only 32 pips. That is well below the 75 PIP average over the last 22 trading days (range is 42% of what is normal).

The high price extended to 1.3522. That took the price within a swing area between 1.35213 and 1.35287. Near the high of that swing area is the falling 100 hour moving average at 1.3529 and the 100 day moving average at 1.3530.

The convergence of all those three levels are helping to put a lid on the pair ahead of the FOMC (at least for now).

It will also help define a key bias/risk level to - and through - the FOMC decision. Stay below and the sellers are more in control. Move above and those sellers could easily turned to buyers.

On the downside today, the low price stalled near 1.3489. Going back to January 6, the 1.3489 to 1.34988 area has been home to swing lows and highs (see red numbered circles).

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