empty
14.11.2024 03:36 AM
Overview of EUR/USD on November 14; The Euro's Collapse Continues

This image is no longer relevant

The EUR/USD currency pair continued its downward trend on Wednesday. While corrections are possible during any movement, the current overall technical picture is clear. Looking at the weekly timeframe, we see a downtrend that has persisted for over 15 years. The same trend is visible on the daily chart but on a larger scale. On the 4-hour chart, a local downtrend began a month and a half ago. No matter the timeframe, the pattern remains consistent. Thus, the first conclusion is obvious: any upward movement is merely a correction. We've been saying this even during the two-year period when the pair was rising.

In our opinion, only a sharp shift in the global fundamental backdrop could reverse this long-term trend. What could cause such a shift? In the coming months, the pair's decline may halt once the market balances it at a fair value, which we estimate to be between 1.0000 and 1.0200. After that, new factors may drive the pair in either direction. It's important to note that even 15-year trends eventually end. A global reversal could occur around the 1.0000 level, but such a reversal would require significant and objective reasons.

At present, we see no prerequisites for such developments. The U.S. economy is much stronger than Europe's, with no evident looming issues. The return of Donald Trump to power is more likely to be positive for the dollar than negative. Unless the U.S. becomes involved in a war, we see no basis for the euro to experience long-term growth.

Meanwhile, Europe faces significantly higher geopolitical risks. The conflict in Ukraine continues unabated, and no one knows when, where, or under what conditions it might end. The European Union's active support for Ukraine could potentially lead to a conflict with Russia, and the consequences of such a scenario are uncertain. Over the next few years, the European Union may remain in a zone of elevated risk, unlike the United States.

Returning to the near term, we believe the dollar will continue to strengthen until the market fully prices in the impacts of monetary policy easing by both the European Central Bank and the Federal Reserve. What are we hearing from the ECB? Primarily that rates will continue to decrease. This comes from a baseline rate already 1% lower than the Fed's. Furthermore, the Fed and ECB have cut rates by 0.75%, but Trump's inflationary policies might lead to smaller rate cuts in the U.S., providing another boost to the dollar.

This image is no longer relevant

Over the past five trading days, the average volatility of EUR/USD stands at 99 pips, categorized as "high." We anticipate movement between 1.0472 and 1.0670 on Thursday. The higher linear regression channel points downward, indicating a sustained global downtrend. The CCI indicator dipped into the oversold area, signaling the start of a new correction. However, the correction was weak and has already ended. A new bullish divergence is forming.

Support Levels:

S1: 1.0498

Resistance Levels:

R1: 1.0620

R2: 1.0742

R3: 1.0864

Trading Recommendations:

The EUR/USD pair continues its downward movement. We have consistently indicated our expectation of a medium-term decline in the euro in recent months and fully support the bearish trend. The market has likely already priced in most or all future Fed rate cuts. If this is the case, the dollar has no medium-term reasons to weaken, though there were a few reasons before. Short positions remain viable with targets at 1.0498 and 1.0472 as long as the price remains below the moving average (MA). If trading purely based on technicals, then long positions can only be considered if the price moves above the MA, with targets at 1.0742 and 1.0864, though we currently do not recommend any long positions.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

Today, following the release of data showing a February slowdown in the national Consumer Price Index (CPI), the Japanese yen continues to trade with a negative tone, creating uncertainty

Irina Yanina 11:07 2025-03-21 UTC+2

US stock market getting ready for zero hour

The Federal Reserve has done all it can to calm the markets, but in 2025, the spotlight has shifted away from the central bank. The S&P 500 has brushed

Marek Petkovich 09:20 2025-03-21 UTC+2

What to Pay Attention to on March 21? A Breakdown of Fundamental Events for Beginners

There are no scheduled macroeconomic events for Friday. The euro and the pound have finally declined against the U.S. dollar. The Federal Reserve has done its part to calm

Paolo Greco 06:06 2025-03-21 UTC+2

GBP/USD Pair Overview – March 21: The Bank of England Had No Impact on the Current Situation

The GBP/USD currency pair traded very calmly on Thursday, as on Wednesday evening. As the chart below clearly shows, volatility has recently dropped to noticeably low levels. What

Paolo Greco 04:16 2025-03-21 UTC+2

EUR/USD Pair Overview – March 21: Markets Panicked in Vain, but That Doesn't Help the Dollar

The EUR/USD currency pair began showing a semblance of a downward correction between Wednesday and Thursday. The price has consolidated below the moving average on the 4-hour chart, but it's

Paolo Greco 04:16 2025-03-21 UTC+2

The Outlook for the Japanese Yen Remains Confidently Bullish

The Bank of Japan (BoJ) kept interest rates unchanged on Wednesday, and the market reacted neutrally, as this outcome was widely expected. BoJ Governor Kazuo Ueda stated that the risk

Kuvat Raharjo 23:46 2025-03-20 UTC+2

The Dollar Takes Back Its Own

Markets shoot first and ask questions later. Upon hearing Jerome Powell's assurance that the Federal Reserve had everything under control and that there would be no recession, U.S. stock indices

Marek Petkovich 23:45 2025-03-20 UTC+2

XAU/USD. Analysis and Forecast

Gold is experiencing a slight decline after reaching a new all-time high, remaining in a defensive stance. Currently, bullish traders are exercising caution, as indicated by overbought conditions

Irina Yanina 10:29 2025-03-20 UTC+2

Fed's message music to bulls' ears

The Fed is not throwing a lifeline to the S&P 500, but does it need one? Lifelines are for those drowning, while the market is merely spooked by a fleeting

Marek Petkovich 09:05 2025-03-20 UTC+2

Markets Are Stuck in a Vicious Circle with No Exit in Sight (Potential Decline for Bitcoin and Gold Prices)

The markets are currently experiencing significant shock due to a prevailing negative sentiment that looms over them like a heavy burden, with no resolution in sight. Given this situation

Pati Gani 08:23 2025-03-20 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.