The Euro is under pressure for the seventh day out of eight as investors continue to react to the lowered outlook of the Euro Zone economy by the European Commission. Early last week, the EC slashed its growth forecasts for all the Euro Zone’s major economies from German to Italy and warned that Brexit and the slowdown in China threaten to make the outlook even worse, according to Bloomberg.
At 11:00 GMT, the EUR/USD is trading 1.1303, down 0.0019 or -0.16%.
“Much of the Euro area’s loss of growth momentum can be attributed to fading support from the external environment, including slower global trade growth and high uncertainty regarding trade policies,” the commission said.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1289 will signal a resumption of the downtrend.
Today’s session began with the Euro down seven sessions from its last main top. This puts it inside the window of time for a closing price reversal bottom. This chart pattern will not signal a change in trend, but it could lead to a 2 to 3 day counter-trend rally, which could alleviate some of the downside pressure.
The short-term range is 1.1289 to 1.1514. Its retracement zone at 1.1375 to 1.1402 is new resistance.
Daily Technical Forecast
With the Forex pair inside the window of time for a closing price reversal bottom, the key level to watch today will be Friday’s close at 1.1323.
A sustained move under 1.1323 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for traders to take out the main bottom at 1.1289. Taking out this level could trigger a further break into the December 14 main bottom at 1.1270. This is a potential trigger point for an acceleration into the November 11 main bottom at 1.1216.
Overtaking and sustaining a rally over 1.1323 will signal the return of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the resistance cluster formed by the downtrending Gann angle at 1.1374 and the 50% level at 1.1375. Since the main trend is down, sellers are likely to re-emerge on a test of this area.
This article was originally posted on FX Empire
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