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Global Instability Limits Euro Upside

EUR/USD Talking Points

  • Fears of recession gripped global markets.
  • Spotlight on anti-fragmentation for Europe.
  • EUR/USD trading at key technical levels.

Euro fundamental backdrop

A bit in the way of market moving events over the weekend, including the global market Euro Left to the mercy of market sentiments. The situation in Ukraine and Russia’s decisions could weigh negatively on the Eurozone, which should cut energy flows to the region. The economic calendar remains light this week (see below) prioritizing recessionary fears until the start of high-impact events on Wednesday. That said, while talks on an anti-fragmentation tool will be key over the next few weeks, morning news after hawkish comments from Deutsche Bank’s CEO about raising rates faster than expected helped lift euro bets. If the ECB manages to clarify or agree on a path towards ‘anti-fragmentation’, this could be extremely bullish for the Euro.

From A dollar In perspective, quarterly/half-yearly flows boosted the greenback last week, which may see some short-term pullback for the euro, but we may see muted price action today due to the Independence Day holiday in the US.

EUR/USD Economic Calendar

eurusd economic calendar

Source: DailyFX Financial Calendar

Technical analysis

EUR/USD Daily Chart

Eurusd daily chart

A chart is prepared Warren VenkatasIG

Price action above The daily EUR/USD chart shows the key area of ​​support around 1.0340 (January 2017 swing low) being defended once again. This key inflection point may mark the start of a lower extended move with the latest formation Descending triangle pattern A confirmation break is required below the support. A rejection occurs if we see a breakout above the triangle resistance that matches the 1.0601 swing high.

Resistance Levels:

  • Trendline resistance (black)/50-day EMA (blue)/1.0601
  • 20-day EMA (purple)
  • 1.0500

Support Levels:

IG Client Sentiment Data: Bearish

IGCS shows current retailers length above EUR/USDwith 70% Traders who currently hold long positions (as of this writing). At DailyFX we often take a view that goes against the grain of crowd sentiment, resulting in trouble.

Connect with and follow Warren on Twitter: @WVenketas

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