mlawson71 wrote: Sun Jan 05, 2020 11:39 pm Either way, EUR/USD is at 1.1160 and it is unclear how it will develop for now, it's possible it will depreciate back below 1.1150.

Yep, looks like it's about the tensions between US and Iran. Looks like a move to the downside is expected this week. What do you reckon bro? Down or up?

EUR/USD resilient as US yields drop on risk-aversion

• EUR/USD is showing resilience amid broad-based risk aversion.
• The dollar is struggling likely due to the losses in the treasury yields.
• The US 10-year yield dropped to one-month lows in Asia.
• Geopolitical tensions are likely to overshadow macro data releases.

EUR/USD is hovering near 1.1165, as the US dollar is struggling to gain ground amid broad-based risk aversion and the losses in the treasury yields.

The tensions between the US and Iran escalated over the weekend with Iran's supreme leader Ayatollah Ali Khamenei promising 'severe revenge' for the US killing of Iranian general Soleimani. The nation also declared that it will no longer abide by any of the restrictions imposed by the 2015 nuclear deal.

Further, President Trump warned of retaliation if Iran attacks US personnel or assets.

The markets, therefore, have turned risk-averse, boosting demand for the classic anti-risk assets like US treasuries, gold, and Japanese yen.

The yield on the US 10-year Treasury note fell to a one-month low of 1.757% in Asia and is currently seen at 1.777% – down 10 basis points on the day.

Meanwhile, Asian stocks are reporting losses with Japan's Nikkei index shedding 470 points at press time. The futures on the S&P 500 are also down 0.33%. Further, the Dax futures are down 0.63%.

As a result, the US yields, therefore, are likely to remain under pressure in Europe. The EUR is backed by a current account surplus and most Eurozone nations' government bonds are offering a negative yield. The markets, therefore, could treat the single currency as an anti-risk asset.

On the data front, the German retail sales for November and final PMI indices for December are due for release. These data sets, however, could be overshadowed by geopolitical developments.

Technical levels
Sources: https://finance.yahoo.com/ (Chart) & https://www.fxstreet.com/news/eur-usd-r ... 2001060408 (Article)

It formed an inverted hammer candlestick at the support 1.1130 on the daily time-frame and bounced off from it, apparently this was the end of the current depreciation, at least for now. It was really up in the air for a while.

It's consolidating around 1.1180, the pair is as undecided as it was before the holidays.

Start loading up on those shorts!

EUR/USD capped by two resistance clusters and may struggle to recover – Confluence Detector

EUR/USD is trading in the mid 1.11s, off the highs. Where next for the world´s most popular currency pair_

The Technical Confluences Indicator is showing that euro/dollar is capped at 1.1155, which is a dense cluster of lines including the Fibonacci 23.6% one-day, the Fibonacci 38.2% one-month, the SMA 50-15m, the previous 4h-low, the Bollinger Band 15min-Middle, and the BB 1h-Middle.

Further above, a stronger resistance line awaits at the pair. The 1.1190 level is the convergence of the Fibonacci 23.6% one-month, the Pivot Point one-day Resistance 1, and the SMA 50-4h.

Looking down, support awaits at 1.1097, which is the confluence of the PP 1d-S2, the Fibonacci 61.8% one-month, and the SMA 50-1d.

Lower, 1.1068 is another cushion. It is the meeting point of the SMA 100-1d and the PP 1m-S1.

Here is how it looks on the tool:


Confluence Detector

The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.

Learn more about Technical Confluence

Source: https://www.fxstreet.com/news/eur-usd-c ... 2001080641

The move south continues, I think it will depreciate back toward 1.1100 and may even break out below that level.

It dropped to 1.1100 as I thought it would but a breakout is yet to occur, which is still possible to happen by the end of the trading week.

EUR/USD depreciated to 1.1085 and found some support there but it remains bearish for now so it will likely break out below that support.

It failed to break out below 1.1085 after all and bounced off from it. Let's see how it will develop next week.

It's consolidating above 1.1100 and so far remains undecided, I don't see a signal for a change yet.

EURUSD still faces downside risks


FX Strategists at UOB Group still believe EUR/USD could be headed for lower levels in the next weeks.

Key Quotes

24-hour view: “EUR was largely sideways overnight in a small range above 1.11. Our view of a mild upside towards 1.1150 (high: 1.1144) panned out as expected. Now, with upside momentum underwhelming, it appears that EUR may have lost its aspirations to propel higher. So, a sideways pattern would more likely preside today, between 1.1105 and 1.1150.”

Next 1-3 weeks: “Downward momentum has improved further and the risk for EUR is still on the downside. However, the mid-Dec low near 1.1065 is a major support and at this stage, the prospect for a sustained decline below this level is not high.

Overall: EUR is expected to remain on the back foot unless it can move above 1.1175 (‘key resistance’ level was at 1.1195 yesterday). Looking ahead, even if EUR were to break below 1.1065, any further weakness is expected to encounter solid support at 1.1030 followed by 1.1000. In other words, we do not consider the current weakness in EUR as part of a major downtrend.”

Sources: https://finance.yahoo.com (Chart) & https://www.fxstreet.com/news/eur-usd-s ... 2001151104 (Article)