EUR/USD Fundamental Analysis: February 7, 2019
The euro major pair is moving in a steady decline following a bearish breakthrough during the US session. Yesterday, it closed on optimistically for the fifth straight session after it struggled in the morning when Donald Trump gave his speech, giving a chance for investors to divert from risks. At the same time, with a pessimistic fundamental data surrounding the euro and positive macro data from the US supported the dollar for a bearish breakout. Consequently, the pair had a sharp decline prior to consolidation around the middle of 1.13 during the early Asian hours. Fed may have a dovish sentiment on its rate hike but the US dollar sustained its positive position in the market as investors and analysts assume the Fed to proceed with the rate hike this year.
Moreover, a good fundamental data surrounding the US Treasury bond yields support the dollar bulls since the beginning of this week’s trading and hovered higher than 1.362, increasing by 0.06% on the day. With the Asian session traders returning the market after the holidays, the trading volume, as well as volatility are expected to increase significantly. Furthermore, the investors are hoping for good macro data and open opportunities for short-term profit.
In the US, the Initial Jobless Claims data is anticipated while in the EU, several reports are to be released including the EU Economic forecast, German Industrial Production, and trade balance data, and ECB Economic Bulletin. Positive results will spur the euro and likely to sustain its consolidative rate but a negative outcome will further bring the price down towards 1.12.
On the technical aspect, there will be less resistance below as it moves smoothly below the 20-, 50- and 100-MA in daily and hourly intraday charts. As for the indicators, both RSI and stochastic signal lines are directed towards the oversold area in the hourly chart while it is still below the oversold area in the 4-hour and daily charts, which means that there is a high chance for the decline of the pair to continue for the day.