HOME > Market Analysis > Market analysis

The short counterattack came? EUR/USD may usher in a sharp fall

On Thursday (March 15), the euro (1.2464, 0.0017, 0.14%)/USD continued to fall in the European market, with the lowest drop to 1.2344. At the moment, trading is light, and the market is waiting for the catalyst to determine the direction of the transaction.

In the 4 hours chart, the exchange rate is above each MA, but below the 23.6% Fibonacci retracement of the previous two weeks, which is about 1.2375. The technical indicators are falling in positive territory, indicating that buying interest has weakened, albeit insufficiently. To confirm that the bear market is coming.

The US data to be announced in the day is unlikely to trigger the exchange rate to break through the current range, but market sentiment may give directional guidance to the currency.

The bottom support is located at 1.2335, 1.2300 and 1.2265 respectively, and breaking the intraday high of 1.2382 will challenge the next resistance at 1.2410 or even 1.2445.

Overnight the euro fell across the board, mainly due to overnight ECB President Draghi once again revisiting dovish arguments. Draghi expressed concern about the downturn in inflation, and poured cold water on the central bank’s expectations of removing asset purchase plans in the foreseeable future.

However, as the US President Trump prepares to impose new tariffs on China and trigger the outbreak of the trade war, any strong rebound in the US dollar will be restrained, so the further decline in the EUR/USD is limited.

Axel Rudolph, a senior analyst at Commerzbank, believes that the exchange rate currently stands at 1.2275.

The euro/dollar has maintained fluctuations in the range of 1.2556-1.2155 in February and early March. The test of the two-month resistance at 1.2407 breaks to point to the 55-day moving average at 1.2275. After falling, it will fall further to 1.2165-55, which is the mid-January and March lows.

A break of this week's 1.2143 high will point to the March high of 1.2447 and then to the January and February high of 1.2538-56. The top line is the 1.2651 drop in the resistance line for 2008-2018 and the 50% Fibonacci return to 1.3190 since the 2008 wave.