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EUR/USD: Teasing a bearish close below the 50-month SMA

  • The bears may feel emboldened if the pair ends today below the 50-month SMA of 1.1396.
  • The sentiment is quite bearish as the EUR posted losses yesterday, despite strong German inflation.
  • The focus is on the Eurozone inflation numbers and the US employment cost index, scheduled for release at 10:00 GMT and 12:30 GMT, respectively.
Currently, the EUR/USD is trading at 1.1340 – below the 50-month simple moving average (SMA) of 1.1396.

In the last five months, the dips to or below the SMA have been short-lived. Hence, it is the key level to beat for the bears. Should the pair close below the 50-month SMA today, then the bears will likely feel emboldened. Moreover, it would mean a resumption of the sell-off from the February high of 1.2556.

More importantly, the bearish sentiment in the EUR/USD market is quite strong. This is evident from the fact that the common currency closed in red yesterday, despite the strong German inflation reading, which backed Draghi's stimulus exit plans.

As a result, the pair is more likely to suffer a bearish close today. The bearish case may strengthen further if the US employment cost index beats estimates, signaling a pick-up in wage-price inflation. An above-forecast Eurozone CPI may offer some relief, however, the for the EUR to find bids, the US employment cost index needs to miss estimates by a big margin.

EUR/USD Technical Levels

EUR/USD

Overview:
    Last Price: 1.1341
    Daily change: -3.0 pips
    Daily change: -0.0264%
    Daily Open: 1.1344
Trends:
    Daily SMA20: 1.1481
    Daily SMA50: 1.1581
    Daily SMA100: 1.1598
    Daily SMA200: 1.1881
Levels:
    Daily High: 1.1388
    Daily Low: 1.1338
    Weekly High: 1.1551
    Weekly Low: 1.1336
    Monthly High: 1.1816
    Monthly Low: 1.1526
    Daily Fibonacci 38.2%: 1.1358
    Daily Fibonacci 61.8%: 1.1369
    Daily Pivot Point S1: 1.1326
    Daily Pivot Point S2: 1.1307
    Daily Pivot Point S3: 1.1276
    Daily Pivot Point R1: 1.1376
    Daily Pivot Point R2: 1.1407
    Daily Pivot Point R3: 1.1426