The Euro is continuing its downward trend as the early afternoon session progresses with the currency pair being unable to rise above the resistance zone of $1.25445. The dollar, which gained strength thanks to a surprise move by the Bank of Japan is right now rising against all major currencies.
Strong PMI reports and a better than expected CB Consumer Confidence has fuelled speculations that the Federal Reserve will ultimately hike the interest rates earlier than what was originally thought, which is obviously excellent for the Greenback.
Many analysts on the other hand firmly believe that the European Central Bank will be soon forced to introduce a bond-buying program as early as December, as the Eurozone economy stutters to a standstill. The divergent policy stances between the ECB and the Fed are the main reason why the Euro has been under extreme pressure over the past few trading sessions.
When looking at the hourly chart for the EUR/USD, the currency pair has been unable to cross over the resistance zone of $1.25445 on multiple opportunities. Additionally, the currency pair fell below its trend-line support of $1.24961, which is obviously a bearish sign.
As of now the momentum indicators for the EUR/USD continue to remain in the oversold zones, which point towards strong selling pressure present at current levels. Furthermore, the relative strength index for the currency pair is currently trending in the bearish zone and isn’t exhibiting any sign of a reversal, which economists feel will negatively impact the EUR/USD going forward. Lastly, the EUR/USD slipped below its daily moving average on the hourly chart.
Short the EUR/USD at current levels for an intermediate target at $1.24325, with a strict stop loss above $1.25445