EUR/USD currency pair had a drastic increase and breached the 1.8000 level experienced last week but then, it turned sharply lower. The currency pair attains new heights only to experience a rapid fall as Italy’s budget comes to the forefront. The Italian government made a major decision on a budget deficit of 2.4% of the Gross Domestic Product which turned out to be higher than the expectation of the European Union and that of the technocratic finance minister Giovanni Tria. A decrease in the Italian stock and bonds affected the EURO heavily. A core inflation of 0.9 percent was recorded while the European Central Bank president Mario Draghi remained bullish on the aspect of an increase in core inflation and wages acceleration. The united states Fed raised rates was as expected which signaled four rises until 2019 comes to an end.
EUR/USD PRICE ACTION TECHNICAL ANALYSIS
- 1.1915 level was the low point in the month of January and marked as an important line. 1.1850 level was the peak in the month of June, 14th before the Euro experienced a decrease by the actions of president Draghi.
- 1.1815 was stated as a high point in the month of September while 1.1750 level held the EUR/USD currency pair four times in the month of July which marked a powerful level.
- 1.1720 level capped the EUR/USD currency pair in mid-September since it is a veteran line that functions in two directions. The 1.1650 level became a swing low in the month of August which was closely followed the 1.1615 level. This level played a crucial role.
- The 1.1570 level was the low point in the month of September. The 1.1530 level held the currency pair two times in the month of August. This marked it an important line. The 1.1435 level held the EUR/USD currency pair down when it was seen trading around the yearly low.
- The 1.1300 level is a round number that held the EUR/USD currency pair in mid-August and in the month of June 2017.
The technical confluence indicators indicate that the EUR/USD currency pair will have difficulties in to rise above 1.1500 level due to the fact that a lot of technical resistance lines are in its way with a peak at 1.1530. The previous triple-bottom is seen as a convergence of Fibonacci 23.6 percent one-day, 4h-high, the Bolinger band 1h-Upper, the Fibonacci 38.2 percent one-day, the simple moving average 200-15m, the simple moving average 50-1h, and the Bolinger Band 15m-Upper.
If the EUR/USD currency pair surges above 1.1530, the upside target would be 1.1640 where there is an existence of a congestion including the simple moving average 200-4h, the simple moving average 100-one day, the Bolinger brand one-day-middle, the Fibonacci 61.8 percent one month, the Fibonacci 23.6 percent one week, and the pivot point one day R1.
A soft support is found at the 1.1475 level which is situated at the confluence of pivot point one-day support 1, the Bolinger band one day lower, the Bolinger band 4h-lower and the pivot point one month support 1. A lower and weak support is at 1.1415.
In conclusion, the EUR/USD currency pair remains bearish as the Italian issues are far from being fixed coupled with the fact that low inflation is a major problem.