- The bias is bearish as long as it is below the median line.
- Friday’s low stands as a bad target.
- The lower midline is seen as the main target.
EUR/USD was trading in the red at 1.0865 at the time of writing. The pair seems poised to continue its downtrend. The euro recovered after hitting Friday’s low of 1.0828. However, the bias remains weak as the US dollar could jump higher.
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Basically, the US and the Eurozone posted mixed data on Friday. The greenback lost some ground against its rivals in the short term as the US ISM Manufacturing PMI came in worse than expected.
Today, the US will release data on factory orders. The economic indicator is expected to record a decline of 2.7% compared to a growth of 2.8% in the previous reporting period.
On the other hand, Germany’s trade balance and the change in unemployment in Spain were better than expected, while investor confidence in the Eurozone Sentic was worse than forecast.
Tomorrow, the US ISM Services PMI and JOLTS Job Openings are high-impact events and could shake up the markets. Positive US data should help the Greenback dominate the currency market in the short term.
Technical analysis of the EUR/USD price: Minor bounce
From a technical point of view, the EUR/USD price weakened and ignored the uptrend line after failing to stabilize above the psychological level of 1.1.
It also fell below the median line of the descending villas (ml), which represents support. After an impressive selloff, the rate returned to retest the midline (support turned into resistance).
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The price could fall again as long as it is below it. Friday’s low of 1.0828 represents a potential downside target. However, the lower median line (LML) represents the next major downside target. The scenario could be reversed if the rate jumps and stabilizes above the midline (ml).
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