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EUR/USD Price Forecast: Euro Eyes a Test of Key Support Ahead of ECB Meeting

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Miguel A. Rodriguez
Miguel A. Rodriguez
05 November 2022
Last week, EUR/USD broke above the 1.2000 threshold for its first time in over two years then traded lower. Will bulls give up control or will they come back?

Euro vs USD Technical Analysis

  • Bearish signals on EUR/USD price chart 
  • Negative outlook below 1.1713 

EUR/USD: Bulls Pullback 

Last week, Euro hit an over 28-month high against the US Dollar at 1.2010. However, the price slipped after and closed a weekly candlestick in the red with a 0.6% loss, as some bulls seemed to cut back. 

Alongside that, the Relative Strength Index (RSI) fell from 64 to 54 highlighting that bulls were losing momentum.  

EUR/USD Daily Price Chart ( June 2- September 9, 2020 ) 


 

Chart Source: Webtrader, Capex.com

On September 2, EUR/USD declined to the current 1.1909 -1.1713 trading zone reflecting a weaker bullish sentiment. This week, the price resumed falling eyeing a test of the low end of the aforementioned trading zone. 

It is worth noting the price/RSI bearish divergence as the former created a higher high, while the latter created a lower high, signaling a possible reversal of the upward trend. 

A daily close below the low end of the zone at 1.1713 reflects even weaker bulls and could encourage bears to take the initiative and possibly press towards the monthly support at 1.1621 (October 2018 high). 

On the flip-side, a failure in closing below the low end of the zone could reverse the current move towards the high end of the zone at 1.1909. 

EUR/USD Four Hour Price Chart ( July 23- September 9, 2020 )


Chart Source: Webtrader, Capex.com

This week, EUR/USD broke below the bullish trendline support originated from the July 23 low at 1.1539 generating a bearish signal. As a result, the price declined today to 1.1751- its lowest level in four weeks. 

To conclude, the bull’s weakness could embolden bears to take control of the price action. Therefore, a break below 1.1690 could send the price towards 1.1641, while a break above 1.1820 may cause a rally towards the high end of the current trading zone discussed above on the daily chart.

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.