somrat4030
Well-known member
Forex Forum Currency Pairs Technical Analysis And Forecast.
EUR/USD is trading below 1.1600, snapping a three-day uptrend amid a rebound in the US dollar alongside the Treasury yields. The risk sentiment remains sour amid growing worries over inflation and the Chinese indebted property sector. All eyes on US inflation.
The Relative Strength Index (RSI) indicator on the four-hour chart fell below 50 in the early European session on Wednesday, suggesting that sellers are trying to dominate the pair's action.
As of writing, the pair was testing the 1.1580/70 (50-period SMA, static level) support area and additional losses could be witnessed if this area turns into resistance. The next target on the downside is located at 1.1530 (static level) ahead of 1.1500 (psychological level).
While many analysts and investors are still bearish regarding the EUR/USD outlook, says Lee Hardman, Currency Analyst at MUFG, who was a seller of the EUR/USD rate from 1.1650,"We are keeping the idea of trading the EUR/USD pair short. The trade idea is off to a good start as the EUR/USD pair fell to its lowest level for the year 2021 at 1.1514. We continue to expect the EUR/USD to trade heavily towards the end of the year on the back of diverging monetary policy between the European Central Bank and the Federal Reserve. The main risk will be a policy surprise from the European Central Bank on December 16 when they are set to unveil their quantitative easing plans for next year.
On the other hand, The GBP EUR exchange rate was -0.10% lower on Tuesday after much stronger German economic sentiment data. The market was expecting another dip in the index to 20, but it came in above 30. The eurozone number was also higher at 25.9 versus an expected 25.9. Today will bring the release of German inflation data and that could move the GBP v EUR.
The GBP to EUR was trading at 1.6980 after a bounce from last week's selling to 1.1700.
Moreover, GBP/USD has started to weaken after a retracement into the 61.8% Fibonacci resistance level at $1.3593.
The selloff seen over the course of the past fortnight looks like it could soon come back into play, with a bearish trend still relevant until the price rises through the $1.3698 resistance level. Until then, there is a chance we could see the price turn lower and head back towards the $1.3411 support level.
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