Senior Economic & Technical Adviser
EUR IS STILL BLEEDING AND SUFFERING AGAINST THE STRENGTH OF THE DOLLAR
EUR/USD fell sharply early in the European session on Thursday as the dollar benefited from safe-haven flows. The next target for the pair to the downside is at 1.0400, and it seems unlikely to register a correction unless the risk sentiment improves.
In case, the major indices on Wall Street suffer heavy losses after the opening bell, the dollar should continue to gain strength and force the EUR/USD lower.
As for the downside, 1.0400 (psychological level, steady from Jan 2017) appears as the next downside target ahead of 1.0340 ( January 3, 2017, low).
1.0500 (psychological level, old support) represents the first technical resistance. Above this area, the falling trend line approaching April 23 is a big obstacle at 1.0530, where the 20 and 50-period simple moving averages lie. Only the daily close above the 1.0530 area can be considered a bullish development and may cause the sellers to exit the market.
Therefore, the overall bearish trend will remain in control during the upcoming period, keeping in mind that breaching 1.0405 might push the price to make some bullish intraday correction to test 1.0470 areas initially, and it may extend to 1.0520 before any new attempt to decline.