EUR/USD Continues Historic Losing Streak
Risk aversion eased on Tuesday, with safe havens JPY and gold coming under pressure alongside with the EUR, this last due to its latest status of funding currency. Macroeconomic data had little to do with the EUR/USD pair decline towards 1.0630, a fresh 7-month low, as imbalance between Central Banks continues to be the main driver of the pair.
The German ZEW survey for November, released at the beginning of the day, showed that economic sentiment continued to decrease in the EU, down to 28.3 from a previous 30.1 and expectations of 32.5. German current situation is also seen worse than previously estimated albeit economic sentiment has improved from 1.9 to 10.4. Nevertheless, a tepid improve in US inflation data for October, weighed more in the market, as the CPI rose 0.2% compared to a year before, against previous 0.0%.
The EUR/USD pair closed the day a handful of pips above this fresh low,, maintaining the dominant bearish tone, despite the limited intraday volatility seen in the pair during these past couple of weeks, with investors still considering a possible retest of the year low at 1.0461. Short term, the 1 hour chart shows that the 20 SMA presents a strong bearish slope, and that advances towards it attracted selling interest. In the same chart, the technical indicators hold below their mid-lines, lacking directional strength at the time being. In the 4 hours chart, the price extended further below a mild bearish 20 SMA, while the RSI indicator heads strongly lower near oversold territory, and the Momentum indicator aims higher below the 100 level, rather reflecting the latest bounce than suggesting further gains.