EURUSD Forecast: Technicals turn bearish for Euro
(Eren Sengezer – FXStreet)
– EURUSD has started the new week on the back foot.
– The negative shift witnessed in risk sentiment helps the USD gather strength.
– The technical outlook points to a bearish shift in the near term.
After having closed the last two trading days of the previous week in negative territory, EURUSD extended its slide early Monday and touched its lowest level in over a week near 1.0250. The technical outlook suggests that the pair’s downward correction could continue in the short term.
The risk-averse market atmosphere at the beginning of the week helps the US Dollar (USD) find demand as a safe haven and weighs on the EURUSD.
Investors are losing hope that China will continue to move away from its zero Covid policy after the country reported deaths for the first time since May and confirmed nearly 27,000 cases over the weekend. Additionally, The city of Guangzhou ordered a five-day lockdown of its Baiyun district, and schools across several Beijing districts shut down.
Mirroring the souring market mood, US stock index futures traded in negative territory in the early trading hours of the European session.
Since there won’t be any high-impact data releases featured in the economic calendar on Monday, the risk perception is likely to continue to influence the action in financial markets. In case Wall Street’s main indexes fell sharply after the opening bell, EURUSD could stretch lower with the USD preserving its strength in the second half of the day.
EURUSD Technical Analysis
EURUSD dropped below the 50-period Simple Moving Average (SMA) for the first time since November 4 and the Relative Strength Index on the four-hour chart declined to 40, pointing to a bearish shift in the short term.
On the downside, 1.0250 (Fibonacci 23.6% retracement of the latest downtrend) aligns as initial support. With a four-hour close below that level, additional losses toward 1.0200 (psychological level) and 1.0150 (Fibonacci 38.2% retracement) could be witnessed.
1.0300 (psychological level, 50-period SMA) aligns as the initial resistance before 1.0350 (20-period SMA) and 1.0420 (end-point of the uptrend).
Gold and crypto analysis
(Naeem Aslam – Avatrade)
Gold prices are retracing further from their recent highs as investors continue to book more profit from the recent rally. It is the dollar index’s strength pushing the dollar index lower. The precious metal has failed to move above 1,800, which shows that there s so much resistance around this level that is stopping the price from further appreciation. In terms of the price action, we really need less dollar strength, which could help the price of the shinning metal move higher.
BTC and Ethereum had another tough weekend. More details were released in terms of FTX’s liabilities, and the market players are still very much sensitive to the FTX news. Traders are concerned about another domino effect, but for now, traders are optimistic that the worst is behind us to a certain extent. The dollar strength and the adverse FTX new flow will still determine the price of BTC, and traders know that they have to respect the price action.