Technical Chart pick of the day: EURUSD – Bearish
· 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: 1.08474, R2: 1.08598, R3: 1.08814
Support: S1: 1.08258, S2: 1.08166, S3: 1.07950
The EUR edge lower as there has been growing pessimism towards the Eurozone economy. Sentiments towards the EUR have drastically dipped after consistent signs of weak manufacturing data and downbeat GDP numbers. Disappointing data has raised concerns towards the actual state of the Eurozone economy, and increased expectations towards the ECB maintaining accommodative monetary policy for a longer period of time. Meanwhile it was reported that Eurozone financial ministers have discussed fiscal boost options, to append fears of a downturn amid the Covid-19 situation. Renewed recession fears, especially with current German Chancellor Merkel’s succession plans in tatters, and the EU cutting growth forecast, doubts are still being cast on the future outlook of the Eurozone economy, and if the eventual fiscal policies will be sufficient. Its latest addition, Bulgaria is now considering delaying joining the common-currency after concerns the preparatory steps could jeopardize a long-standing fixed exchange rate to the common currency. The Balkan nation had planned to join ERM-2 — a mechanism that acts as the euro’s ante room before full membership — by the end of April. Coupled with imminent downside risks, such as its trade ties with the UK and the US, more pressure could entail for the EUR.