Technical Chart pick of the day: EURUSD – Bearish
The EUR dipped this morning, ahead of the European GDP data releases. Sentiments have been dampened as markets have been increasingly pessimistic about the outlook in the Eurozone. The EU has started to cut growth forecasts as it tries to secure a trade deal with the UK before the year ends, while there is still tensions with the US as trade talks will be opened and discussed soon.
US Treasury Secretary Mnuchin said that any negative economic impact from the coronavirus will not last beyond 2020. Fed officials have continued to reiterate that the US economy is in a healthy state. Fed Chairman Powell has constantly shown confidence in the US economic outlook and is of the view that there are no reasons why the current situation of low unemployment, rising wages and high job creation cannot carry on. This was broadly echoed by other Fed members who believe the US economy is in a better position than it was at the end of last year. Hence, with the Fed generally seeing the US economy in a good place, coupled with the recent spate of US data being upbeat, FED is expected to leave near term monetary policy unchanged. US retail sales numbers will be published today while the coronavirus situation appears to be propping up the USD as well as worries safe haven currencies.
· On a technical perspective, the trend is bearish, with prices below the 20, 40, 100 and 200 EMA.
· Prices failed to break above the 20 EMA and retraced. This indicates that selling pressure is present.
· Based on the pivot point analysis, prices are below the pivot level. This signifies bearishness.
Resistance: R1: 1.08749, R2: 1.09090, R3: 1.09636
Support: S1: 1.08203, S2: 1.07998, S3: 1.07452