The EURUSD attempted to break below 1.2500 following the 50bp rate cut by the European Central Bank in the previous week, and as the outlook for growth and inflation is expected to deteriorate further in the months ahead, fears of a deepening recession is likely to weigh on the exchange rate as the flight to quality continues.
[B]Currency Pair:[/B] EUR/USD
[B]Chart: [/B]60 Min Charts
[B]Short-Term Bias:[/B] Bearish
[B][U]Analysis[/U][/B]
</p>
The EURUSD attempted to break below 1.2500 following the 50bp rate cut by the European Central Bank in the previous week, and as the outlook for growth and inflation is expected to deteriorate further in the months ahead, fears of a deepening recession is likely to weigh on the exchange rate as the flight to quality continues. After reaching a low of 1.2329 in October, the EURUSD snapped back to reach a high of 1.4720 on 12/18, but the lack of momentum to push back to the December high continues to favor a bearish forecast for the pair. Over the next few hours of trading, the Sentix investor confidence survey could stoke increase selling pressures for the euro-dollar as the index is expected to fall lower, and may continue its move to the downside to fill-in the gap from the 120 SMA. If the pair breaks below the moving average, we may see the euro-dollar make an another attempt to move towards 1.2500. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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