EUR/USD currency pair was initially on stable grounds but letter experienced a sharp fall thereby losing the support of 1.1530 of last week. The currency pair continues to decline as the United States dollar continues to dominate. The Italian government officially made a pronouncement and agreed on a budget deficit of 2.4 percent which was way above the request of the European Union of two percent. The Italian government tried to get overboard by making processes of achieving a lower deficient in the coming years of 2020 and 2021. This deficit still awaits a verdict from the commission. The United States dollar increased due this upbeat with yields as high as 3.20 percent. Powell’s Hawkish who is the Fed Chairman proclaims that he is open to placing interest rates above inflation which signifies a tight monetary policy.
EUR/USD TECHNICAL ANALYSIS
- 1.1915 level was a low point in the month of January which marked a relevant point. 1.185 level was the peak in the month of June, 14th before the president of the European central bank, President Mario Draghi drives the Euro down.
- 1.1815 level was the high point in the month of September while 1.1750 level held the pair for at least four times in the month of July and marked a powerful level.
- 1.1720 level is a veteran line that capped the EUR/USD currency in mid-September since it works in both directions. 1.1650 level became the swing low in mid-August and this marked the level as an important line.
- 1.1570 level was a low point at the end of September while 1.1530 acted as a support for the currency pair not less than two times in the month of August. This marked it as an important line.
- 1.1460 level was the low point during the early drop in the month of October 2018. 1.1435 held the pair down when seen trading around the yearly lows.
- 1.1365 level was the line that cushioned the EUR/USD currency pair to drop as it moved down. 1.1300 held the currency pair in mid-August and in the month of June 2018. The level is a round number.
The technical confluence indicator portrays that the EUR/USD currency pair will experience great difficulties in increasing above the 1.1500 level due to the fact that a lot of technical resistance lines are forging ahead to close at the 1.1530 level. There is a convergence of the Fibonacci 23.6 percent one-day, September’s low, the 4h-high, the Bollinger Band 1h-Upper, the Fibonacci 38.2 percent one-day, the Simple Moving Average of 200-15m, the Simple Moving Average 50-1h, and the Bollinger Band 15m-Upper.
If the EUR/USD currency pair increases above the 1.1530, the striving upside target would become 1.1640. At the technical confluence indicator, the soft support is seen around the level of 1.1475 which is the confluence of the pivot point one-day s1 and the Bolinger band one-day lower, the Bolinger band 4h-Lower, and the Pivot point one-month S1.
Lower, weak support is found at the 1.1415 level where there is a meeting point of the Fibonacci 161.8 percent one-day, and the Pivot Point one-week S2.
In conclusion, the EUR/USD currency pair keep experiencing a bearish market invent. Even if eventually, every issue with Italy gets resolved, the basic fundamentals of the EUR/USD currency pair remain unchanged since the Fed is tightening and the European Central bank takes gradual steps towards the exit.