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EUR/USD is seeing fresh volatility thanks to global risk sentiment souring on geopolitical news. Could this move draw in more sellers as bearish price patterns are forming?

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12168.39 -1.13%
FTSE: 7258.82 -0.45%
S&P 500: 2967.40 +0.03%
DJIA: 26887.20 +0.30%
US 10-yr 1.665% +0.03
Bund 10-YR -0.605% -0.011
UK 10-YR: 0.503% -0.026
JPN 10-YR: -0.252% -0.015
Oil: 55.88 -2.46%
Gold: 1533.50 -0.43%
Bitcoin: 8409.29 -1.49%
Etherium: 168.25 -1.24%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Fed’s Kaplan speaks in moderated Q&A at 12:00 am GMT (Sept. 26)
  • German GfK Consumer sentiment at 7:00 am GMT (Sept. 26)
  • ECB Economic Bulletin at 9:00 am GMT (Sept. 26)
  • Euro area M3 money supply & Private loans at 9:00 am GMT (Sept. 26)
  • U.S. GDP q/q, Goods trade balance, Wholesale inventories, & unemployment claims at 1:30 pm GMT (Sept. 26)

What to Watch: EUR/USD

EUR/USD 1-Hour Forex Chart
EUR/USD 1-Hour Forex Chart

We’re seeing a strong rally in the Greenback against the major currencies today, likely on the recent slew of geopolitical risks hitting the news wires, including calls for impeachment of U.S. President Donald Trump and rising trade tensions after Trump’s negative comments on China’s trade practices at the U.N. General Assembly. And with potential catalysts coming from the Europe (ECB head Draghi’s speech) and the U.S. (GDP, housing, inflation data) in the final days of the week, the break down in EUR/USD looks very interesting.

On the one hour chart above of EUR/USD, we can see a very clear breakdown from a strong area of interest around the 1.1000 handle. There’s also a clear pattern of lower ‘highs’ ahead of the breakdown showing the total control the bears have had over the last two weeks. So, the current market is obviously in the bears favor and if upcoming speech from Draghi signals more stimulus and/or the U.S. gives us more positive economic surprises, the next support area just below 1.0950 is a likely reachable target–and it may not hold long as support if geopolitical risks continue to rise. This market looks shortable from current levels up to the falling ‘highs’ pattern, where exactly is all dependent on the each individual trader.

The bull argument on EUR/USD is pretty tough right now, but if we do see the impeach story and/or the U.S.-China trade sentiment flip, the Greenback COULD see sellers. Gotta emphasize the “could” as positive developments in the U.S.-China trade situation tends to be bullish for the Greenback. It may take very weak U.S. economic updates on Friday to really get bearish dollar momentum going, and if that is the case and the falling ‘highs’ pattern is broken, look for a move up to the next resistance area around 1.1050 – 1.1075.