Amid a sliding stock market, the USD has hung in there against the majors for this Monday forex session. Moderate losses against the Euro, British pound, and Japanese yen have been the early-week story for the Greenback. A considerable gain against the Canadian dollar is the lone bright spot, as the EUR/USD is grinding to the bull.
As we have mentioned throughout the forex trading day, fears over tariffs and a coming U.S./China trade war have been primary drivers of the action. With a wide-open economic calendar until the RBA Minutes and ECB President Draghi’s speech scheduled for the U.S. overnight, any comments out of Washington or Beijing will be front-and-center.
EUR/USD Technical Outlook
Last Thursday’s concerns over tariffs brought EUR/USD bears out of hibernation. The result was an epic selloff and a test of the 1.1550 area.
There are two levels to watch going into ECB President Draghi’s speech scheduled for Tuesday:
- Resistance(1): Thursday/Friday 38% Retracement Level, 1.1661
- Support(1): Swing Low, 1.1510
Bottom Line: In an update from last Friday, I broke down a potential short trade from Fibonacci resistance for the EUR/USD. This recommendation is still valid. If you haven’t seen it, check it out here.
In the coming sessions, we may see a convergence of technicals forming robust topside resistance. If this is the scenario after Draghi’s comments Tuesday, a short trade may be in the offing. Be sure to check in with FX Leaders throughout the week for ideas and analysis facing the EUR/USD.