EUR/USD Breaks To The Bear, Returns To 1.1300 - Forex News by FX Leaders
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EUR/USD Breaks To The Bear, Returns To 1.1300

Posted Wednesday, January 2, 2019 by
Shain Vernier • 1 min read

The first forex trading day of the year often brings heavy action and that is exactly what we are seeing in the EUR/USD. Rates have fallen precipitously, from an early session failed auction at 1.1500 to the near 1.1300 level. Traders are betting heavily on the EUR for 2019 in anticipation of a dovish FED policy.

However, the remainder of the abbreviated trading week may reverse the bearish action. Tomorrow marks the release of the ISM Manufacturing PMI and Friday features FED Chairman Jerome Powell issuing a public speech. Powell’s comments will be scrutinized by currency players and investors around the globe. If the term “flexible” is his key talking point, then the Greenback will continue to soften vs the majors.

EUR/USD Technical Outlook

Today’s action has featured a failed auction near the 1.1500 handle for the EUR/USD. The test of 1.1500 was a great opportunity to get short and one that was highlighted (although not perfectly timed!)in a Live Market Update from last week. Check it out here.

EUR/USD, Daily Chart
EUR/USD, Daily Chart

Here are a few levels to watch as the day progresses:

  • Resistance(1): Bollinger MP, 1.1378
  • Support(1): Daily SMA, 1.1360

Overview: For the time being, investors are selling their dollars in search of a better bet. The EUR has not benefitted, posting a 100 pip intraday loss vs the USD. Subsequently, a test of 1.1300 appears to be in the cards for the immediate future.

The action in the EUR/USD is encouraging and perhaps the precursor for a directional move. Keep a close eye on November’s high (1.1499) and November’s low (1.1215). In the event this market embraces an early year trend, it will likely originate from one of these price points.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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Olayiwola Abiodun
Olayiwola Abiodun
2 years ago

Thanks fir the great job being done . My own point of observation is this: if investors are selling dollars I expect EURUSD to go up and that was why I went long but I am surprised seeing EURUSD come down heavily today . What do you think could have been the cause ?