EUR/USD Daily Analysis: August 16, 2019
A bullish morning star pattern was seen after the surge of the EUR/USD pair last week. Yet, the significant support level of 1.1118 is not yet established, which means that the bears can be in control of the movement. This area is important as this held various declines for this aside from a short drop below in latter days of July.
On Thursday, US economic data was released that shows better than forecast that supports the US dollar. Retail sales grew by 0.7% in July, more than the 0.3% forecast of an increase. This excludes the automobile and gas, which then prompted the data to increase by 1.0%.
Trade balance from Eurostat is also to be released soon. Also, there is the consumer sentiment and building permits from the United States. Although, there are not likely to keep the impact on the exchange rate.
The significant level of EUR/USD pair was broken and there will also be not many purchases. Moreover, the pair begins to enter the oversold zone on the 4-hour chart.
The support level is around the area of 1.1075, which makes the lowest close on a daily basis for the year. Moving forward, the next probable target is around 1.1027, which was the August low.
It is not likely for the pair to break again for another fresh yearly low today, considering few expected fundamental events on the economic calendar.
Closing of the pair today is relevant. If the pair manages to keep the current levels, there will be a reverse bullish trend of last week’s reversal pattern. More importantly, this will confirm the resumption of the EUR/USD downtrend.
The overall momentum of the EUR/USD pair is downward, although the pair begins to oversell on the 4-hour chart. In comparison to a basket of major currency pairs, the common currency is likely to have its biggest loss. Yet, even if there is a light economic schedule, the news may induce some volatility in the pair.
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