15th February 2019 - EURUSD faces increasing downside pressure

Walid Salah Eldin

Active member
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The single currency is struggling to stave off its slide against the greenback, as the market sentiment is still dominated by the European economic slowdown and its impact on the interest rate outlook in the euro zone which can suffer further in case of reaching no Brexit deal.

The investors have been shocked this week by zero quarterly GDP growth in Germany in the last quarter following shrinking by 0.2% in the third quarter, after Italy scored previously faster quarterly shirking in the fourth quarter of last year by 0.2%, After shrinking by 0.1% in the third quarter.

They Germane shocking figure came, after European Commission revised down its forecast for EU GDP growth in 2019 to only 1.3%, after it was forecasting 1.9% last November expecting growth in Germany this year by only 1.1% after it was expecting last November growth by 1.8%.

These data came along with last month ECB's signal that the risks surrounding the EU growth have turned to the downside, amid persisting geopolitical uncertainty and protectionism threats.

The ECB can struggle longer than expected to find its path to normalize the monetary policy, while the speculations of ECB's missing of this Fed's tightening cycle are mounting.

As The Fed started to adopt more cautious stance can be developed to easing stance in case of increasing of the downside pressure and facing lower pricing pressure

After The FOMC clarified its current worries about sluggish inflation in US which has consistently fallen below its 2% yearly goal, following its recent meeting by the end of last month.

The FOMC said also it is prepared to slow or even reverse the steady course of selling of its held portfolio of Treasuries and mortgage bonds which has been uploaded during the credit crisis for propping up the economy.

After it has finally omitted from its released economic statement that some further gradual increases would be warranted placing that the Fed would be patient in evaluating the health of the economy.

EURUSD-Daily-15-02-2019 03-18-02 م.png

EURUSD could not maintain a place yesterday above 1.13 and today it could not reach this level to find currently aggregated selling pressure driving it closer to 1.1250 to contain all of yesterday rebounding try sending dovish sign over the short term.

This downward wave can be extended to the downside for opening new range of trading has not been seen since Jun. 27 2017, in case of breaking last Nov. 12 supporting level at 1.1215 raising the downside momentum.

EURUSD is now in its seventh day of being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.1432.

The pair is still depressed by continued trading below its daily SMA50, its daily SMA100 and also its daily SMA200.

EURUSD daily RSI-14 is referring now to lower existence inside the neutral region reading 38.432
While EURUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line barely inside the neutral territory at 20.301 close to its oversold area below 20 leading to the downside its signal line which is higher at 23.440, after negative crossover inside the neutral area.

Important levels: Daily SMA50 @ 1.1387, Daily SMA100 @ 1.1403 and Daily SMA200 @ 1.1529
Experienced S&R:
S1: 1.1215
S2: 1.1109
S3: 1.0838
R1: 1.1341
R2: 1.1514
R3: 1.1569

Kind Regards

Global Market Strategist of FX-Recommends

Walid Salah El Din
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