The EURUSD pair looks set for more losses against the US dollar on the foreign exchange market this week after last week’s better than expected US jobs report and the FED announced that they would be reducing QE purchases.
Looking at the soft weekly price close last week the EURUSD pair is likely to be heading lower. With daily and weekly prices are getting lower and lower,, so it is hard to turn bullish towards the EURUSD right now.
Additionally, the US dollar index had a breakout week, with the buck making strong gains against not only the euro, but also the British pound and the Canadian dollar.
Worryingly, the technicals over the medium-term highlight that the EURUSD could actually drop towards the 1.1400 level if we look at higher time frame analysis.
Bearish patterns surrounding the EURUSD pair at the moment, and we should also consider that the technical and fundamentals are perfectly aligning for more EURUSD weakness.
Sentiment is also worryingly high and is confirming the sell side is the is best towards the EURUSD from a contrarian point of view. Traders have not yet turned bearish, which is a big concern.
The ActivTrader Market Sentiment tool shows that some 72 percent of traders are bullish towards the EURUSD. This is a big increase from last week, but it is worth watching as bullish sentiment is what euro bears need to sink the pair even further.
EURUSD Short-Term Technical Analysis
The four-hour time frame continues to show that the EURUSD pair has fallen under the neckline of an extremely rising wedge pattern, which could send the EURUSD pair towards the 1.1450 area.
Upside failure around the 1.1620 level happened last week, meaning that the EURUSD pair is heavily bearish this week from a short-term technical standpoint.
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EURUSD Medium-Term Technical Analysis
Looking at the daily time frame things look very bearish for EURUSD pair also after bulls failed around cloud resistance from the Ichimoku indicator last week.
If the EURUSD pair fail to stage a rally this week then I can confidently predict that bears will test towards the 1.1400 area.
Just to chart the upside, multiple daily price closes above the 1.1540 level should shift to bulls favour and the 1.1620 level could be rested.
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