Wednesday, February 6, 2019

EUR/USD - 06 February 2019


Fundamental Highlights

The Euro continued the bearish momentum in yesterday’s session, as EU Retail Sales missed the forecast (-1.6% vs -1.5%). On the other hand, the US Dollar soared across the board, despite the US ISM Non-Manufacturing PMI missing the estimates (56.7 vs 57.2). Investors shrugging off this economic news could mean that their bullish sentiment since Friday’s NFP data is still the primary driver of this recent weakness. In today’s economic news, we have the German Factory Orders coming out in the morning which could have a small impact on the Euro. But our main focus should be in the afternoon, when a set of important data is coming out from the US which will most likely affect the single currency; Building Permits, Core Durable Goods Orders, Core Retail Sales, GDP, Retail Sales and Trade Balance. We should also note that some of the economic data from the US might be postponed due to the ‘partial’ government shutdown.

Technical Analysis

The Euro pierced through the 50-200-day moving averages and closed just above the 1.14 key support, indicating that the bears are still in control since the beginning of this month. If 1.14 (S1) breaks, then we could possibly see further weakness towards 1.1350 (S2). The bulls need to get price back above 1.1450 (S1) to take back control.

Support: 1.14/ 1.1350
Resistance: 1.1450/ 1.1485

Chart (H4)