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Forex: Here is why the EUR / USD downward movement is likely to continue.

EUR / USD

Time frame: D1

Technical Analysis: For the 6th consecutive day, the EUR / USD pair has undergone strong sales. The chart shows that the pair has started a new downward movement in the direction of the main bearish trend, with the last day bar closing bellow strong support on a short-term uptrend channel which has started on 13.11.18.

What does Dollar Index (DX) shows us

The dollar index is known to show the strength of the dollar, with EUR / USD in strong correlation with it. On the chart, we can see that the price continues to move in its long-lasting upward trend, with the price moving upward with the potential of testing the previous highs. As we said earlier, EUR / USD and DX are in strong correlation, which suggests that the EUR / USD pair should continue its downward movement and make a bottom at about 1.1140.

Indicators for EUR / USD: The price is below 200 and 50 EMA, indicating strong resistance to the price.

DeM – In neutral values and does not give clear signals.

Indicators for Dollar Index (DX): The price is over 200 and 50 EMA, and they play a strong supportive role.

DeM – In neutral values and does not give clear signals.

Alternative scenario: Retracement from the current values for DX and EUR / USD would lead to a new test of 200 MAs.

 


 Trader Milko Zashev


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