EUR/USD Weekly analysis

The value of the Euro continues to slide against the US Dollar, due to the turbulent times going on in the euro zone right now.

Italy has just completed the Bond Auctions which have actually gone relatively successfully,but the outlook is still poor for the nation and thus for the Euro as a whole,because the +7% yields are seen as unsustainable for Italy to continue with, long term.

All of this has had an overall negative effect on the EUR/USD price action over the past week, and the outlook for the coming weeks does not show much change…

From a technical perspective the Euro is falling through the floor on medium term time frames. Many traders will be trying to spot the bottom of these moves but as the old saying goes ‘The trend is your friend’ so betting against a continuation of these negative moves could be a mistake.

The chart below shows just how bearish the EUR/USD pair is right now, after it has continued to break several key lows (Red) one after the other without any kind of significant rally:

The recent swing lows are also breaking to the down side, indicating increasing downward pressure for the medium term.

The next week should see a continuation of this move, from a technical perspective, but remember that the whole negative bias has been caused by the fundamentals and they will play a massively important role going into next week.

Next week sees the release of the famously volatile NFP announcements, which could mean major moves for the Euro pair.

A negative number for the US Dollar might not be such an impactful event seeing the relative problems in the Euro zone are so much more serious but anything positive out of the states could drive the pair further down, especially since there are no major numbers expected out of Europe next week anyway.

As ever,trade conservatively and in the direction that price is going.