December 29, 2021

Does This Bring An Early Signal For EUR/USD To Continue To Plunge?

 The Euro appears to be receiving the impact of a slowing economy as most areas in Europe continue to report record contagions of the Covid-19 case, thus hampering the movement of the value of the Euro.

Indirectly, the USD seems to be taking the opportunity to strengthen due to the low liquidity of the currency which most investors do not want to take risks at the close of 2021.

Nevertheless, the strengthening of the USD can also be attributed to speculation that the Federal Reserve (Fed) wants to tighten policy earlier based on hawkish statements during the last meeting.

It seems that the price on the chart of the EUR/USD pair has already started a downward rhythm of more than 40 pips which at the same time continues to penetrate the key zone of 1.13000 and includes trendline support.

The downtrend also made a retracement at the end of the session (Tuesday) which has given an earlier signal leading to the beginning of the bearish trend change action.

The signal was strengthened after the price movement closed yesterday's trading session by making an engulfing bearish pattern and moving below the Moving Average 50 (MA50) resistance level.

In conclusion investors are likely to place a tendency that the price may continue to decline in tracking to the support level that often supports the surge around 1.12650.

A lower decline above the support level is indirectly likely to push the price movement to test the level of 1.12350 and will be evaluated for the next target.

On the other hand, if the price again denies the decline, then the high level at 1.13500 will probably be the level reached first if the price rises again.

An increase towards the bullish trend indicator will be displayed if the price movement manages to reach the resistance zone of 1.14000 which was once the focus zone during 2019 and 2020.