Friday, July 19, 2019

EUR/USD - 19 July 2019


Fundamental Highlights

The Euro had a volatile session yesterday by dropping to 1.12 in the first half of the day, amid reports that ECB is studying potential revamp of inflation goal, which means more monetary stimulus for a longer period. In the second half, the Single currency soared towards 1.1282 after Fed’s Williams said that the central bank should act quickly to lower rates than to wait for disaster to unfold, which made the market think that the Fed could make an even deeper cut later this month. Traders are once again torn between two dovish central banks without any clear direction. If today’s German PPI numbers miss expectations, it could reinforce ECB’s dovish stance. However, any weakness, seen after German data, could be reversed in the US session if the Michigan Consumer Sentiment Index misses estimates by a big margin.

Technical Analysis

The Euro found support yesterday at the 1.12 psychological level as the bulls found a strong momentum and pushed price higher by breaking above the 50-day moving average and tested the 200-day moving average around 1.1280s. Currently, the common currency is pulling back once again as traders lack any strong conviction for both sides. Price could consolidate for now between these 2 major levels, 1.1280 and 1.1240, until one of them gets broken to confirm the next possible move.

Support: 1.1240 / 1.12
1.1275 / 1.13

Chart (H4)