The EUR/USD currency pair dropped to hit a new 22-month low on Wednesday reaching levels last witnessed in 2017. The currency pair’s current downward movement appears unstoppable with the greenback continuing to edge the Euro from a fundamental perspective.
The EUR/USD pair appears to be lacking any impetus to trigger a recovery with traders eyeing the upcoming US data. The pair dropped to trade at a rate of 1.1150, the lowest level reached since June 2017.
EUR/USD Fundamentals Overview
From a fundamental perspective, traders will be looking at the upcoming US economic data including the Initial Jobless Claims and Continuing Jobless Claims both scheduled at around 12:30 GMT on Thursday.
And tomorrow (Friday), traders will be watching closely as the US Gross Domestic Price Index (GDPI) for Q1, 2019 is released.
In the EU all eyes will be on ECB’s De Guindos Speech set to take place also at around 12:30 GMT. Guindos is the Vice President of the European Central Bank. Depending on how things turn out today, the tables could be flipped again tomorrow with the release of the US GDPI.
EUR/USD Technical Analysis (the 240-min Chart)
Technically, the EUR/USD currency pair is testing new territories never seen for the past 22 months. This means that new sets for support and resistance zones have been created.
And as demonstrated on the 240-min chart, this recent drop has come following what appears to be a head-and-shoulders pattern. This creates interesting opportunities for both the bulls and the bears.
The bulls will hope for a rebound as the pair enters oversold territory by targeting profits at around 1.1180 while the bears will be looking for the current plunge to continue by targeting profits at around 1.1120.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the pair appears to be closing on a bearish breakout following a symmetrical triangle pattern formation. This again confirms the two main profit targets for both the bulls and the bears.
The bulls will again target profits at 1.1180 with a long-term target at around 1.1320 while the bears will be looking down below at around 1.1120, or even further below where the pair even at 1.0000.
In summary, the EUR/USD currency pair has made a huge drop in the last couple of days and while the technicals suggest an immediate rebound as the pair approaches oversold levels, the fundamentals seem to suggest otherwise.