Euro To Dollar Forecast: EUR/USD Signaling Bearish Trend
Euro currency exchange rate vs US Dollar struggling to break $1.1420 resistance. It looks like that the EUR/USD pair may be setting up for a sharp decline in the near term as the investors eye FOMC meeting minutes.
This past week Euro managed to pop closer to the $1.1440 resistance area against the united states dollar, but since then it has been under a lot of pressure and signaling a change in the trend from bullish to bearish.
Euro to US Dollar exchange rate to decline?
The EUR/USD currency pair was seen hovering below a key level of $1.1400 where the bulls failed on more than a couple of times. There is an expanding triangle pattern forming on the hourly chart, which can act as a catalyst for the next move in the short term.
A couple of bearish signs for the Euro
First, EUR/USD is below the 100 hourly simple moving average, and second, it is struggling to break and settle above the $1.1400-20 area.
However, on the downside, there is a critical bullish trend line positioned around the $1.1330-40 levels, which may provide support to the pair if it moved down. The US Dollar was already seen gaining pace against the currencies like the British Pound, Japanese Yen, Swiss Franc and Indian Rupee. However, the greenback is lagging momentum since a few other currencies like the Australian Dollar and New Zealand Dollar and Canadian Dollar managed to pop higher versus the USD.
EUR/USD Trend Bearish?
We can say that the pair is likely to move down in the near term, but the triangle lower trend line and the bullish trend line could provide support for the Euro bulls at $1.1330. The stated level is also coinciding with the 38.2% Fib retracement level of the last leg from the $1.1167 low to $1.1435 high.
On the upside, EUR/USD buyers need to take it above the $1.1420 area and there should be an hourly close if they have to gain control.
Overall, there are more bearish signs compared to the bullish signs.
Today, the German Industrial Production report was released by the Statistisches Bundesamt Deutschland. The forecast was slated for outputs of the German factories and mines to decline by 1.8% in February 2016, compared with the previous month.
However, the outcome exceeded the market forecast, as the German Industrial Production declined only by -0.5%. The report added that “In January 2016, the corrected figure shows an increase of 2.3% (primary +3.3%) from December 2015”.
Later today, the U.S. will witness a crucial economic release, as the Federal Open Market Committee (FOMC) meeting minutes will be published. It will highlight more information on the recent central bank’s decision not to increase interest rates.
There are speculations that there may be no rate hike in April, due to recent Yellen’s dovish remarks. So, the Forex market and professional traders will be looking for clues on when the next interest rate hike is possible in Wednesday’s FOMC meeting minutes.
So, there are chances of swing moves in the EUR/USD pair and the US dollar after the FOMC meeting minutes release.EUR/USD Support Levels
1.1330 And 1.1300EUR/USD Resistance Levels
1.1400 And 1.1420