EUR/USD -14/9/2023-
• All technical indicators are pointing to a bearish picture for the Euro
• First, the price broke below an ascending channel since January
• Second, the series of higher lows is being questioned as we are trading at the previous swing low at 1.0630 and bulls really need to defend that level to gain traction
• Third, the price is trading below the 200 MA for more than a week without even testing that level back
• The 2021-2022 1.5 year long down trend was followed by almost a yearly rally which stopped very close to the 61.8% level of that decline, which questions whether the yearly rally that we have seen recently is a major bullish trend or just a correction for the previous major bearish trend
• The level 1.0630 is critical in this scenario and if bears successfully break below it, next support will be 1.05 followed by 1.0220
• Today's dovish ECB statement and Lagarde speech supports the bearish picture as the Euro area growth is slowing and forecasts for the coming months and year remain tilted to the downside
• First, the price broke below an ascending channel since January
• Second, the series of higher lows is being questioned as we are trading at the previous swing low at 1.0630 and bulls really need to defend that level to gain traction
• Third, the price is trading below the 200 MA for more than a week without even testing that level back
• The 2021-2022 1.5 year long down trend was followed by almost a yearly rally which stopped very close to the 61.8% level of that decline, which questions whether the yearly rally that we have seen recently is a major bullish trend or just a correction for the previous major bearish trend
• The level 1.0630 is critical in this scenario and if bears successfully break below it, next support will be 1.05 followed by 1.0220
• Today's dovish ECB statement and Lagarde speech supports the bearish picture as the Euro area growth is slowing and forecasts for the coming months and year remain tilted to the downside
Ramzi Abou Abdallah, CFTe, CMT
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