European currency continues falling against the USD. Investors have been selling the pair for the fourth week in a row without making any significant pauses. On Monday, November 12th, EURUSD is testing the low close to 1.1250, the level it last reached on June 28th, 2017 and may probably continue trading downwards.
The key risks for the European currency remain the same. First of all, an unresolved problem with the Italian budget. From Italy’s point of view, everything is fine, but the European Commission is not comfortable with the budget deficit, which is increasing due to the expansion of expense items. Secondly, investors are very actively responding to an article in The Times about possible Brexit complications in the United Kingdom. The article said that several ministers were ready to resign from their positions and leave offices due to sharp differences in opinions and plans with the Prime Minister Theresa May.
These two things increase investors’ demand for “safe haven” assets with the USD being one of them.
At the same time, one should remember that the American currency is supported by strong labor market data along with the intention of the US Federal Reserve to increase the key interest rate for the fourth time this year in December.
At the beginning of the week, the USA is celebrating the Veterans Day. In this light, the economic calendar is almost empty and investors have to use existing drivers in their trading.
From the technical point of view, one should pay attention to several different timeframes and levels of the current tendency. The first thing worth mentioning is that a new descending impulse has broken the key low, thus indicating a continuation of the long-term downtrend. At the moment, the short-term downtrend is testing the support line of the main channel; it is moving towards the support level at 1.1175. After reaching it, the price may start a new correctional uptrend to reach the resistance line at 1.1355.
Author: Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Disclaimer
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
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