Bottom line: EURUSD outlook might be looking bearish over the next few weeks, until prices remain below 1.1400. Bears are looking poised to break below 1.1167 interim support, and drag lower towards 1.1000 in the short term.
Fundamental Outlook:
EURUSD is up since Asia Open today, as the exchange rate is trading close to 1.1280/85. The exchange rate has gained as risk sentiment has opened this week on a bullish note. It could come under pressure as the week progresses and drop towards 1.0636.
COVID-19 pandemic has been rising across Asian countries along with the US. Trade wars between US-China, border situation between India-China and a looming economic recession are strong fundamental factors that can easily reverse risk sentiment. Risk associated EURUSD, AUDUSD might come under pressure, going forward.
GBPUSD has managed to bounce back from 1.2250 lows. The exchange rate is trading around 1.2500 for now and is expected to come under renewed pressure over Brexit woes. With the extension over transition behind us, UK and EU need to finalize terms by the end of 2020.
FTSE is up +1.0% along most Asian Markets, and trading close to 6250 levels. The indice is expected to stay below the June 08 high at 6510, going forward. The above fundamental factors, might soon trigger another selloff in Global Equity Markets.
Technical Analysis:
EURUSD had rallied through 1.1420 on June 10, 2020 and since then, the currency has remained in control of bears. As we prepare to publish this article, EURUSD is testing the recent swing highs around 1.1300. Interim resistance stays intake at 1.1350 and prices should ideally remain below that mark.
EURUSD had earlier managed to drop from 1.1500 through 1.0636 as an impulse wave. Strong resistance is marked at 1.1500, and EURO needs to break higher to change the overall trend. At the moment, bears might be preparing to resume lower and push through 1.0636 levels.
Most traders might be preparing to initiate fresh short positions around 1.1280/1.1300, with protective stops above 1.1420 and projected target towards 1.1000 and further. Only a break above 1.1500 will change the long term trend.
Prepared by
Harsh Japee, Technical Analyst.
EURUSD Chart
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