Chart Analysis: 4H EURUSD 24.01.2020
24 January

Chart Analysis: 4H EURUSD 24.01.2020

EURUSD

 

Technical Chart of the day: 4H EURUSD - Bearish

 

Last night the ECB left interest rates unchanged and maintained a dovish stance by confirming the need to keep monetary policy accommodative for an extended period of time while launching a broad review of its policy. Going forth, ECB President Lagarde wants to redefine the ECB’s main goal and how to achieve it. How the ECB will change its formulation of price stability, which is defined as an annual inflation rate close to 2% over the medium term, will be crucial to anticipate future policy moves. Lagarde has refrained from revealing her favoured option and the review will only be completed by the end of the year. Meanwhile, warier sentiments remain towards economic numbers in the Eurozone. Although there has been a recent improvement in the economic outlook, as global data stabilise, coupled with the Sino-US phase one deal, the positive impact may not flow to the EU. In fact, EU trade commissioner Hogan had previously voiced worries that Chinese companies will be forced to buy more US goods and services, in turn hurting the EU. Moreover, there is also still fear of US tariffs against the EU, as US President Trump is now likely to focus his attention on the EU now that the Sino-US Phase One trade deal is completed. President Trump has also recently threatened to impose high tariffs of 25% on automobile imports from the EU once again, should there be no OECD agreement on the digital tax. Thus, more downside risk could be imminent for the EUR.

 

  1. On a technical perspective, the trend is bearish, with prices below the 20, 40, 100 and 200 EMA.
  2. Prices failed to break above the 200 EMA and retraced. This indicates that selling pressure is present.
  3. Prices have broken below the 127% Fibonacci support levels. This signifies bearishness.

 

Resistance: 100%: 1.1085; 61.8%: 1.1119        Support: 127%:1.1061; 161.8%: 1.1031 

 

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