EURUSD slumps to 1.125 on Friday to continue the recent losses. Ahead of the US retail sales data, the following technical insight is based on Elliott wave theory.
June 14, 2019 | AtoZ Markets - The Euro-dollar currency pair slumps further on Friday to continue the bearish run from 1.1348. For the first time in a week, the currency pair was few pips from 1.125. The US-China trade war and the Fed's rumoured decision of announcing a rate cut next week still dominate major headlines.
The US retail sales data is about to be released. The market expects much better data for May than April's. The core retail sales and retail sales data are expected at 0.5% and 0.7% respectively. If the data come significantly better than expected, EURUSD should tank further below 1.125 to 1.12. A worse than expected data would cause a bullish response but the pair is likely to continue downside till next week's Fed rate and monetary decisions.
EURUSD technical analysis: important price levels
After almost hitting 1.125, the price has retraced to 1.126-1.1265 (a critical intraday support level). A proper break below the 1.125-1.1265 support zone will most likely see the currency pair fall further to 1.12 which is the next support level. Below 1.12 is 1.11. It remains to be seen if the current bearish run will be that strong. To the upside, the most important resistance level is the 1.1345-1.135 zone. Only a bridge above this level would see price rallying toward 1.142, 1.1515 and 1.157 resistance levels.
EURUSD Elliott wave analysis: will the dip go deeper?
Price is moving as expected based on what was discussed in the last update. The chart below used in the last update expected price at 1.12 after breaking below the blue rising trend line.
A 3-wave bearish zigzag to 1.1050 was expected to complete the 5th leg of the ending diagonal 5th wave of the bearish impulse wave that started in January 2018.
The blue trend line is out of the way. Further price fall is expected especially if the US retail sales data come as expected or better. The Fed decision next week will be a big factor but for now, the short-term market sentiment is bearish.