Weak Bounce! EUR/USD Fails to Reverse Downtrend

Tank

Summary:

On Thursday, U.S. economic data will be released, including the number of initial jobless claims.

SELL EURUSD

EXP

TRADING

1.14245

Entry Price

1.12000

1.16000

1.14409 +0.00257 +0.23%

0.0

Pips

Flat

1.12000

Exit Price

1.14245

Entry Price

1.16000

Fundamentals

The European economic agenda was relatively light, and statements from European Central Bank officials were mixed. Following Iran’s attacks, the president of the German Bundesbank said, “We’re back to square one,” and argued that the ECB should adopt a meeting-by-meeting approach. Meanwhile, the ECB president stated that he was unsure what action the central bank would take in two weeks.

U.S. Central Command revealed in a statement that “pursuant to the Commander-in-Chief’s instructions, U.S. Central Command forces have begun additional strikes against Iran to further degrade its ability to threaten freedom of navigation in the Strait of Hormuz.” Earlier, the Federal Reserve released the minutes from its last meeting, showing that all officials voted unanimously to keep interest rates unchanged and acknowledged the stability of the labor market. In addition, most participants “leaned toward” not using the previously more dovish language and agreed to issue a shorter monetary policy statement.

Technical Analysis

On the daily chart for the EUR/USD pair, the Bollinger Bands are widening downward, and the moving averages are diverging downward, indicating that the overall downtrend remains intact. The MACD fast and slow lines continue to trade below the 0 line, and the RSI stands at 42, indicating that the market is in a bearish mood. On the 4-hour chart, the Bollinger Bands have begun to narrow, moving averages have flattened, and prices are facing resistance at the 12-period EMA. With the RSI at 52, market participants are largely adopting a wait-and-see approach. Strategically, look to sell on rallies.

Weak Bounce! EUR/USD Fails to Reverse Downtrend_1

Weak Bounce! EUR/USD Fails to Reverse Downtrend_2

Trading Recommendation

Trading Direction: Sell

Entry Price: 1.142

Target Price: 1.12

Stop-Loss Price: 1.16

Support Levels: 1.14, 1.13, 1.12

Resistance Levels: 1.17, 1.2, 1.21

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Weak Bounce! EUR/USD Fails to Reverse Downtrend

Risk Disclosure