There has been a strong downward rally in the EURUSD pair after the presidential election held on Tuesday, November 8.The green bucks have been exhibiting tremendous strength in the financial market and the current loss of the EURO has been extremely intensified since the pair is Deeping down without any slight retracement. After hitting the high at 1.12963 the bears have to control the market for the last two week. This week is going to start with a very important event for the EURO since the ECB president Mario Draghi is going to deliver his speech at the press conference. Optimistic traders are expecting hawkish statement at the press conference but investors are in fear since the overall sentiment is extremely bearish at the current moment. Most importantly the percentage of the rate hike in the month of December has been increased to 81.3% due to the recent excellent performance of the U.S economy. On the contrary, the FED is most likely to come up with a hawkish statement on the next Thursday in their FOMC meeting minutes. If things go as smooth as it is going now then the EURUSD pair is most likely too deep furthermore without any correction in the next week. To be precise the upcoming week has very little to offer to the EURUSD pair since all the major economic news releases are most likely to come in favor of the mighty green bucks. However, a dovish statement from Janet Yellen in the FOMC meeting minute might help the EURO to recover its losses to a certain extent in the event of the FED meeting.
Daily chart analysis for the EURUSD pair
Figure: Technical parameter in the EURUSD pair
The EURUSD pair has been falling relentlessly in the market after the pair managed to break the critical triangle support level at 1.08518.Though there has been an initial bounce in that level but the price literally went through the support zone after the U.S presidential election. The triangle chart pattern suggests a strong drop in the price which is nearly about 700 pips. Currently, the price has only completed half of its journey and professional traders are expecting another 300 – 400 pips price drops in the pair. The most important critical support level for the EURUSD pair in the daily chart lies at 1.04318 level which might create some buying pressure in the market. The current price level is too deep for the traders to enter short for which professional traders are cautiously waiting for the slight retracement of this pair towards the broken support level at 1.08518 to enter fresh short in the market. The first initial bearish target for the pair would the critical support level at 1.04318.A valid break of the level will help this pair to complete its downward near the level 0.96375.In the eyes of trained professional, the pair is most likely to find strong support near the critical support level at 0.96375 which might help this pair to start the fresh new bullish rally in the market. The current price action scenario in the daily indicates zero buying pressure in the market which clearly indicates that buying this pair at the current price level will be an immature act.
Weekly chart analysis for the EURUSD pair
Figure: Weekly chart analysis for the EURUSD pair
The EURUSD pair has been closed below the important support level on the weekly chart which is marked at 1.06332.Though there has been a clear bearish breakout of the weekly bullish trend line in the EURUSD pair but conservative traders are still waiting for bearish price action confirmation signal to short this pair. The steep bearish rally in the market also indicates that the pair might exhibit slight bullish correction in the market at any moment which might result in the false breakout of the weekly trend line support level. If the pair manages to find some buying pressure at the current level then we will see a rise in the price towards the first critical resistance level at 1.08484 level. Professional traders will be cautiously observing that level since this level is marked as the sweet spot for them since lots of resistance is there to restrict the bullish correction of this pair. But before shorting this pair at that level bearish price action confirmation signal is required since it will reduce the trading risk to a great extent. On the contrary, if the fails to achieve bullish momentum in the market then we will see a price drop towards the first critical support level at 1.04318.There might be a decent bounce in the price from that level but the critical support level is most likely to be taken out by the sellers in the market.
Summary: This week is going to be an important week for the EURUSD pair since in the opening of the week ECB President Mario Draghi is going to deliver his speech at the press conference. If he fails to provide hawkish speech in that press conference then the EURUSD will most likely to suffer another strong bearish move in the market. On the contrary, the strong positive tone from the ECB president Draghi might give some temporary support to EURUSD pair before it collapses again. The risk for the EURO has been furthermore intensified as FED is most likely to deliver a hawkish statement in the upcoming week FOMC meeting minutes. Considering all the technical and fundamental parameter the overall sentiment of the pair remains strongly bearish. Experts are suggesting to take only short orders in this pair in the minor retracement with bearish price action confirmation signal.