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Fundamental analysis

EURUSD Under Downside Pressure

GKFX | Feb. 1, 2019
EURUSD Under Downside Pressure

The selling bias around the single currency remains well and sound in the second half of the week and is now dragging EURUSD to the 1.1440 region, coincident with the key 100-day SMA.

February 1, GKFX – Spot is down for the second session in a row so far today, coming under further downside pressure after failing at the 1.1510/15 band on Thursday, where sits a Fibo retracement of the September-December drop.

EURUSD looks to CPI, NFP

Risk sentiment is suffering the poor figures from the Chinese Caixin manufacturing PMI published overnight, which moved further into the contraction territory during January (48.3). These data somewhat eclipsed the positive tone from the US-China trade talks in Washington, where both parties agreed to resume negotiations later this month.

Data wise in Euroland, final January manufacturing PMIs are unlikely to move the dial in EUR, leaving all the attention to the preliminary inflation figures in the region during the same period. Across the pond, the greenback should be under pressure in light of the release of Non-farm Payrolls.

What to look for around EURUSD

Recent Q4 GDP figures in Euroland sparked some optimism among traders, keeping up hopes that the ongoing slowdown in the region could be temporary. Politics in Euroland will also be a factor to have in mind in the next months, with EU parliamentary elections coming up in May and investors vigilant on the social scenario in France and populist developments in Italy.

On the USD-side, the now neutral stance from the Fed carries the potential to limit occasional bullish attempts, while markets keep looking for clues regarding the timing of the end of the balance sheet run-off.

EURUSD technical analysis

At the moment, the pair is losing 0.06% at 1.1439 and a breakdown of 1.1434 (low Feb.1) would target 1.1422 (21-day SMA) en route to 1.1390 (55-day SMA). On the flip side, the next up barrier lines up at 1.1514 (high Jan.31) seconded by 1.1515 (50% Fibo of the September-November drop) and finally 1.1569 (2019 high Jan.9).

Disclaimer

This article was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.