Forex Forum EUR, USD, GBP, AUD Technical outlook.
EUR/USD remains under heavy pressure and keeps navigating the area of the recent YTD low near 1.1350.
The continuation of the downtrend appears favoured in the short-term horizon. That said, the 2008-2021 line emerges as a critical support around 1.1350. A break below this area in a convincing fashion exposes a retracement to, initially, July 2020 low at 1.1185 ahead of 1.11688 (low June 19 2020).
In the meantime, extra losses remain on the cards as long as the pair trades below the immediate resistance line (off September's high) today near 1.1620. In the longer run, the negative outlook persists while below the 200-day SMA, today at 1.1869.
Moreover, Signs of a continental return toward containment measures in the past put another question mark on the Eurozone's economic outlook for the winter months and just as the dollar benefits from investors' growing conviction that the US Federal Reserve may raise interest rates in the US next year, which severely affected the EUR/USD rate last week.
While the market is likely to remain alert to the coronavirus situation in continental Europe, other factors will also be important to the price movement in the EUR/USD rate including the preliminary estimate of third-quarter GDP growth from Eurostat on Tuesday. The consensus expects GDP to reveal a solid 2% q/q growth rate for the last quarter. Perhaps most important for the single European currency is cutting investors' appetite for the dollar after it was announced that inflation in the US in October exceeded 6% last week.
On the other hand, RETAIL TRADERS STILL LONG GBP/USDTurning to retail trader positioning, IG client sentiment data for GBP/USD show 71.58% of traders are net-long, with the ratio of traders long to short at 2.52 to 1. The number of traders net-long is 2.55% lower than yesterday but 19.35% higher than last week, while the number of traders net-short is 25.00% higher than yesterday but 0.41% lower than last week.
Here at forum.forex we typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. However, positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a mixed GBP/USD trading bias.
Moreover, Momentum is slowly turning extra bullish for GBP/AUD charges, however the pair hasn't 'turned the corner' simply but. GBP/AUD charges are nonetheless under their every day 5-, 8-, 13-, and 21-EMA envelope, which stays in bearish sequential order. Nevertheless, every day MACD has turned greater and has been rising for six consecutive periods, whereas every day Gradual Stochastics have superior via their median line.
The pair's rebound immediately on the 23.6% Fibonacci retracement of the 2020 excessive/2021 low vary at 1.8213, within the type of a hammer candlestick, hints that one other try greater might quickly arrive. A transfer above 1.8437 would filter out the November highs, in addition to retake the uptrend from the January 2021 and Could 2021 swing lows.
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