The EUR/USD currency pair, after the drastic decrease and new lows, experienced a quick recovery back into the known ranges. However, an important German survey and monitory inflation elements stand out in a week Brexit has shown high trends to have a meaningful impact on the common currency. Major stocks fell and the world’s most popular currency pair which is the EUR/USD remained quite stable at most period of the time. The impact of the United States inflation sent the US dollar lower while surging the EUR/USD currency pair higher. In the European zone, the trade balance and industrial output of Germany beat expectations.
EUR/USD TECHNICAL ANALYSIS
The EUR/USD currency pair started the week on a drastic decline, attaining new lows of 1.1422 level. After the drop, the currency pair recovered with a cap at the 1.1615 resistant level which was mentioned last week. Here are the technical lines from top to bottom.
- 1.1915 level was the low point in the month of January and marked a relevant level. The 1.1850 was the peak level in the month of June 14th, before the president of the European central bank, President Mario Draghi drove the Euro down.
- The 1.1815 level was the high point in the month of September while the 1.1750 held the EUR/USD currency pair in four different occasions in the month of July and stayed a powerful level.
- The 1.1720 level capped the EUR/USD currency pair in mid-September since it is a veteran line that worked in two different directions. The 1.1650 level was recorded as a swing low in the month of August (late August) and it is very closely followed by the 1.1615 which played a pivotal role.
- The 1.1570 level was the low point in the month of September. The 1.1530 level supported the currency pair twice in the month of August. This marked it an important line.
- The 1.1460 level was the low point when the currency pair initially dropped in the month of October 2018. The 1.1422 level was the low point in the month of October (mid-October).
- The 1.1365 level temporarily cushioned the drop that the currency pair experienced on its way down. The 1.300 level is the round number that held the EUR/USD currency pair down in the month of June 2017.
In conclusion, Italy remains a drag on the European zone while the United States dollar remains a safe-haven currency. The continuing monitory divergence will most likely weigh heavily on the EUR/USD currency pair. In this case, the currency pair remains bearish.