Where to Now for the EUR/USD as the Rally Fades?
Rowan Crosby • 1 min read
The EUR/USD was full of hope as we entered Friday trade. The USD had been falling and the EUR/USD was sitting on a strong up move. However, it appears the optimism is all but done now.
On Friday, we saw the USD regain some strength. The US had a big miss in retail sales, but nevertheless, the Greenback stayed strong.
Trade fears are still present at the moment and the reports out over the weekend seem to indicate the US will impose the next round of tariffs. However, that rate will be lower at 10% to appease a few parties that opposed the move.
The week ahead will be a little thin on the economic data front. There are a few top-tier events from the US, namely housing data and the Philly Fed.
The Eurozone is releasing CPI early in the week, which is the only real market mover in my opinion.
The EUR/USD has once again really struggled with resistance at 1.1700-1.1740. This is the second time price has tried to press higher and failed.
The mumours out of the Eurozone about the ongoing risks, continue to weigh on price. And from a technical perspective, the resistance is getting stronger and stronger overhead.
The trade war fears appear now to be baked into the USD a fair bit. And with a November midterm election getting closer, there are suggestions the trade rhetoric might start to cool down for a few months.
Either way, we are clearly bearish below 1.1740 and that appears to be a good area to continue to look for shorts. With a clear target of 1.1500 which is the first major support level.