The EURUSD pair remains in focus as technical indicators continue to signal sustained bearish momentum despite a recent rebound. Price action consistently aligns with a downward trend, supported by key technical tools such as the 50-period EMA, Momentum Oscillator, and RSI. These signals, alongside broader concerns about the euro's prolonged weakness, emphasize the importance of technical and fundamental factors in driving currency market dynamics.
Overview
The EURUSD pair remains in focus as technical indicators continue to signal sustained bearish momentum despite a recent rebound. Price action consistently aligns with a downward trend, supported by key technical tools such as the 50-period EMA, Momentum Oscillator, and RSI. These signals, alongside broader concerns about the euro's prolonged weakness, emphasize the importance of technical and fundamental factors in driving currency market dynamics.
Key Economic Events
Friday 15:30 (GMT+2) - Canada: GDP m/m (CAD)
Saturday 3:30 am (GMT+2) - China: Manufacturing PMI (CNY)
Technical Analysis
The EURUSD pair, while rebounding from its recent low of 1.03327, remains entrenched in a bearish trend. Technical indicators continue to signal a downward trajectory, reinforcing the cautious outlook for the currency pair.
Since reaching 1.12134 on September 25, the pair has been in a sustained downtrend, with its movement consistently aligned with bearish signals from key technical tools. The price remains firmly below the 50-period Exponential Moving Average (EMA), confirming persistent downward momentum. Additionally, the Momentum Oscillator is yet to cross above the critical 100 level, underscoring weak price acceleration. Meanwhile, the Relative Strength Index (RSI) remains below the neutral 50 mark, further validating the bearish sentiment.
These combined technical indicators suggest that the EURUSD pair is likely to face continued pressure unless significant structural changes occur in market dynamics.
Potential Upside Targets
Should the bulls take market control, traders may direct their attention toward the four potential resistance levels below:
1.06092: The initial resistance is seen at 1.06092, which represents the swing high from November 20.
1.07607: The second price target is determined at 1.07607, corresponding to the swing low marked on October 23.
1.08757: The third target is identified at 1.08757, aligning with the 61.8% Fibonacci Retracement drawn from the high point, 1.12134, to the low point, 1.03327.
1.12134: An additional price target is estimated at 1.12134, which corresponds to the high reached on September 25.
Potential Downside Targets
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
1.04523: The first level of support is identified at 1.04523, representing the weekly Pivot Point, PP, calculated using the standard methodology.
1.03327: The second support level is determined at 1.03327, reflecting the daily low marked on November 22.
1.01758: The third support level is seen at 1.01758, corresponding to the weekly support, S2, calculated using the standard Pivot Points methodology.
1.00190: An additional downward target is observed at 1.00190, corresponding to the weekly support, S3, calculated using the standard Pivot Points methodology.
Fundamentals
According to Reuters, the euro's steep 3.8% drop against the US dollar in November has sparked fears of heightened global market volatility. Now nearing parity with the dollar, the currency faces pressure from eurozone economic weaknesses, US President-elect Trump's proposed tariffs, and geopolitical tensions. Analysts warn that further declines could disrupt multinational earnings, commodity imports, and export competition, particularly for nations sensitive to euro-dollar shifts.
Investor opinions diverge sharply, with some predicting the euro could drop to $0.99, while others expect a recovery by 2025. Rising bets on eurozone rate cuts and uncertainties around US inflation and debt sustainability complicate the outlook. Traders are bracing for potential volatility spikes, reminiscent of the turmoil triggered by yen-dollar swings earlier this year.
Conclusion
In conclusion, the upcoming economic data from Canada and China, alongside the technical and fundamental analysis of the EURUSD pair, highlight the complex interplay of factors influencing global markets. The bearish outlook for the EURUSD, supported by technical indicators, underscores continued downward pressure unless significant market shifts occur. Meanwhile, broader concerns about the euro's decline and its potential implications for global volatility remain central to investor sentiment. As markets await key data releases, traders should closely monitor these developments to navigate the evolving landscape effectively.