Technical analysis of EUR/USD for August 07, 2023
August 7, 2023 5:22 pmVideo
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Overview :
All elements being clearly bearish, it would be possible for traders to trade only short positions (for sale) on the EUR/USD pair as long as the price remains well below the level of 1.1030 (first resistance). The sellers’ bearish objective is set at 1.1000.
It is a busy start to the week for the EUR/USD pair . German industrial production numbers need to impress ahead of Fed speeches later in the session. A bearish break of this support would revive the bearish momentum.
The sellers could then target the support located at 1.0913. In case of crossing, the next objective would be the support located at 1.0913. The EUR/USD pair traded lower and closed the day in the negative territory near the price of 1.1000.
Today it was trading in a narrow range of 1.1030-1.0900, staying close to Friday’s closing price. On the hourly chart, the EUR/USD pair is testing resistance – the moving average line MA (100) H1 (1.1030). The situation is similar on the four-hour chart.
Based on the foregoing, it is probably worth sticking to the south direction in trading, and while the pair remains below MA 100H1, it may be necessary to look for entry points for selling at the end of the correction.
After the surge in German factory orders in June, the market focus will turn to industrial production numbers this morning. Factory orders increased by 6.2% in May and 7.0% in June, suggesting a bounce back in industrial production.
However, economists forecast industrial production to fall by 0.4%, aligned with the manufacturing PMI survey. Relative Strength Index (RSI) is still set below 50 which indicates a strong bear market in the near future.
The EURUSD pair shows additional negative trades to approach 1.0955 support line, and the price needs to break this level to ease the mission of continuing the decline and head towards our expected negative target at 1.0880.
Therefore, we will continue to suggest the bearish trend for the upcoming period, supported by the negative pressure formed by the EMA50, reminding you that it is important to hold below 1.1030 to achieve the waited targets.
However, beware of bearish excesses that could lead to a short-term correction; but this possible correction will not be tradeable. Probably, the main scenario is continued decline towards 1.0881 (last bearish wave). The alternative scenario is consolidation above MA 100 H1, followed by rise to 1.1059 (July high).
The material has been provided by InstaForex Company – www.instaforex.com
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