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The euro falls today and interrupts its upward trend

The euro falls today and interrupts its upward trend

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The euro loses energy in the half-week session and turns down against the US dollar, in a day without major macroeconomic references. In this way, the price of the EUR/USD is retracted 0.3% to 1.1118, leading to the psychological level of 1.1100, a technical support of great relevance.

Investors have not paid much attention to eurozone inflation data (final report) and have completely ignored the favorable results of the German IFO survey that showed a rebound in business confidence in December.

With Brexit aside and the trade war between the United States and China resolved to some extent, the market has again focused on the ECB’s monetary stance. While Christine Lagarde has shown more optimism about the balance of risks, many traders still doubt and believe that the economy of the eurozone has not yet bottomed out. This situation could justify the injection of new stimuli in 2020.

EUR/USD TECHNICAL ANALYSIS

In the daily chart of the EUR / USD you can see that, since January this year, sellers have defended the 200-day moving average with great conviction. Each time the pair has risen and tried to exceed this rolling average, the price has fallen below it quickly. In fact, during this period of time, the price of the EUR / USD has not closed above the moving average of 200 sessions for more than seven consecutive days. All this suggests that supply exceeds demand around this technical indicator .

For this reason, the 200-day moving average would continue to function as a major resistance in the short term. That makes sales operations remain attractive, considering the location of the price action. A possible strategy involves the execution of short films at 1.1120, with a goal of support benefits at 1.1038 (or alternatively at 1.1000) and a stop loss at 1.1185 (resistance).

TECHNICAL GRAPH OF EUR/USD

EUR / USD technical chart

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