Bearish picture still intact

13 พ.ค. 2019

Fundamental analysis: Although signs of small recovery of the euro zone started showing according to economic indicators, trade war escalation raised markets concerns of slowing global growth which is not benefiting the European union nor giving any hopes of rate hikes by the ECB, therefore giving the USD more strength as a safe haven.

Technical analysis: EUR/USD has been rallying for the past few days creating higher lows/higher highs but this was clearly a pullback since it failed to close above a key resistance level around 1.125-1.126 where is located the 50-D SMA, a horizontal resistance line and a descending trend line since January ( all shown on the chart ).
I also noticed a shooting star candlestick pattern which is a visual description of what happened today: Bulls tried taking prices higher but the movement lacked follow-through. After that bears took over, sent prices lower and most importantly managed to close the day well below the open.

In my opinion, tomorrow is gonna be a bearish day. However, bears need more work to do. In other words, first support to be broken is near 1.12 figure where is located 20-D SMA after that 1.1172 under which the bear trend will continue and retest 1.111 YTD low.