Wednesday, June 19, 2019

EUR/USD - 19 June 2019


Fundamental Highlights

The Euro fell sharply yesterday, after ECB President Draghi said that further interest rate cuts remain part of the central bank’s tools, and left doors open for more stimulus if needed. Following his speech, Germany released June ZEW Economic Sentiment Indicator, which plunged to -21.1 for the country and to -20.2 for the whole Union, which increased the uncertainty and the stability of the Euro zone economy. Moreover, Trump tweeted that he’s meeting President Xi in the next G-20 summit, putting a bit of pressure on the greenback. Today, the US Federal Reserve will have its monetary policy meeting, market participants are expecting some dovish shift in the wording, paving the way for a rate cut as soon as next month. However, the combination of the latest positive macroeconomic data, the trade war relief and the US equities being near all-time highs, could influence Chair Powell to remain in ‘patient’ mode, which will end up benefiting the US Dollar even more.

Technical Analysis

The Euro bulls got rejected by the bears at 1.1240 yesterday as the sellers pushed the single currency below 1.12 and the 200-day moving average. As long as price remains below these levels, the bears will stay in control. The sellers need to break below 1.1182 to push price lower towards 1.1150 and possibly 1.1125. On the other hand, the buyers will attempt to force the common currency above the 200-day moving average to regain control.

Support: 1.1182 / 1.1150 / 1.1125
Resistance: 1.12 / 1.1240 / 1.1260

Chart (H4)