Bearish Signs in EUR/USD After Closing the Week Below 1.10
EUR/USD has been retreating for a month and sellers are breaching the 50 daily SMA which has been acting as support
EUR/USD continues to remain on a bullish trend in the larger frame, but it has been declining since the middle of July and concluded last week on a bearish note, although the losses were relatively modest. The price opened around the major level at 1.10 and moved above and below it last week, to finally end up below that big round level, although it still remains in proximity to that area. Financial markets experienced difficulty in finding a clear direction due to uncertainties surrounding the economic outlook, resulting in a lack of distinct trend, with the 50 SMA (yellow) acting as support on the daily chart.
The release of the United States’ monthly employment report towards the end of the previous week contributed to the uncertainty. The report presented a mixed picture, raising questions about whether the US Federal Reserve (FED) would continue to raise interest rates or not. The Nonfarm Payrolls (NFP) report indicated a decrease in the Unemployment Rate to 3.5% in July, accompanied by an increase in wages, although the employment figures were softer, below 200K. Annual earnings saw a rise of 4.4% in July, now outpacing the rate of inflation.
This data seems to have added complexity to the decision-making process for the Fed regarding its monetary policy, hence contributing to the lack of a clear market direction. Inflation figures last week didn’t help much, with CPI consumer inflation coming up softer, while the PPI producer inflation saw an increase.
We did see a jump right after the soft CPI (consumer price index) figures, but the price returned back down and closed the day with an upside down pin candlestick which is a bearish signal. Friday closed with a bearish signal and sellers pushed EUR/USD below the 50 daily SMA, so it seems like they are in control. The break of the 50 SMA opens the door for further declines to the lower line of the ascending channel, which comes at around 1.0750.
EUR/USD Live Chart
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals