Original Article By: Christopher Lewis
Source: MENAFN – https://menafn.com/1110309807/EURUSD-Forecast-0711-Bearish-Trend-Remains-Video
EUR/USD Forecast (07/11): Bearish Trend Remains Firm
The EUR/USD currency pair continues to trade with a bearish bias, maintaining a downward trajectory against the US dollar. Recent trading sessions reflect persistent pressure on the euro as market participants react to macroeconomic indicators, central bank policies, and geopolitical considerations. Below is an in-depth analysis of the pair’s performance, examining technical indicators and broader international developments affecting its direction.
Current Market Sentiment
The forex market remains highly sensitive to investor sentiment, particularly as it pertains to risk appetite, inflation trends, and monetary policy expectations. The US dollar continues to benefit from a number of factors:
– Hawkish stance by the Federal Reserve
– Strong economic data from the United States
– Continued risk aversion in global markets driving demand for safe-haven assets
– Weak performance in the eurozone economy adding to the euro’s vulnerability
These factors have combined to exert strong downward pressure on the EUR/USD pair.
Technical Analysis Overview
From a technical standpoint, the EUR/USD pair continues to show signs of weakness. The currency is trapped below multiple moving averages, endorsing the bearish picture. Buyers have attempted to mount rebounds, but each rally attempt is firmly rejected near key resistance levels, affirming sellers’ dominance.
Key Technical Indicators
– 50-day Exponential Moving Average (EMA): The pair is well below this average, which is currently sloping downward. This suggests sustained bearish momentum.
– 200-day EMA: Similarly, the pair remains underneath the longer-term moving average, eliminating any near-term bullish case.
– Relative Strength Index (RSI): Currently hovering around the 40 level, indicating weak bullish momentum and room for further downside without being oversold.
– Support level at 1.06: This is a crucial psychological and technical support level. A decisive break below this area could open the door toward the 1.05 level or lower.
– Resistance level near 1.09: This price area has acted as a ceiling in recent sessions, halting any upward movement and confirming strong bearish rejection.
Price Action Patterns
– The pair has been forming lower highs and lower lows on the daily chart, which is a classic definition of a bearish trend.
– Candlestick formations also support the bearish view, with strong bearish engulfing candles appearing near resistance zones.
– Periodic attempts to rally have been met with selling pressure around the 1.0850 region, reinforcing it as a critical resistance level.
– Price action suggests the market remains unable to build any significant bullish momentum.
Macroeconomic Factors Affecting EUR/USD
Numerous fundamental factors are contributing to the continued decline of the EUR/USD pair:
1. Interest Rate Divergence
– The European Central Bank (ECB) maintains a cautious stance on interest rate hikes amid ongoing concerns regarding economic growth within the Eurozone.
– In contrast, the US Federal Reserve remains more aggressive in its approach toward combating inflation, with potential for further rate hikes.
– This divergence makes the US dollar more attractive for yield-seeking investors and institutions.
2. Eurozone Economic Conditions
– Recent economic indicators from the Eurozone have been lackluster, particularly in core economies such as Germany and France.
– Manufacturing and industrial output figures have shown significant decreases, underscoring weaknesses in regional growth data.
– Ongoing energy-related concerns and inflationary pressures continue to weigh on household consumption and business investment.
3. Political Uncertainty
– Issues such as government instability in some Eurozone countries, ongoing tensions with Russia, and overall European Union bureaucratic gridlock have undermined confidence in the euro.
– Policy indecision has turned investors away from the euro in favor of safer assets.
4. US Economic Resilience
– Strong US employment figures, rising wage growth, and
Read more on EUR/USD trading.