EUR/USD: Weekly Technical Analysis for February 3-7, 2014

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Fundamentally, the EUR/USD remains on the downside in the medium term picture as inflation pressure continues to weigh on the Euro currency. The disappointing data published last week Friday raised speculations that ECB President Mario Draghi could step in with another rate cut at this week’s meeting scheduled on Thursday, February 6, 2014. The greenback also continued to gain strength over the Euro after FEDS announced last week Wednesday to trim 10Billion dollars from the 75billion bond-buying program.


Technically, a clear break of support 1.35065(the pair’s lowest since January 2014) was seen at last week’s trading session which signals that further decline in the pair is expected to 1.32961 support. With MACD, RSI, Stochastic and 55EMA on the 4hrs and daily time-frame showing more supply of the currency pair is expected at the coming week, I strongly recommend looking for short positions.


However, a decent pull back wave 2 corrections from the fall from resistance 1.37370 to 1.34780 should be expected before the commencement of a further decline to support 1.32961, the mild buying correction should be limited at 1.35703 resistance. On the other hand, a break of resistance 1.35703 should see further demand of the pair to 1.36600 which would nullify the current bearish trend.


Key high economic important releases that would be focused on this coming week are U.S ISM Manufacturing PMI, Euro Minimum Bid Rate, ECB Press Conference, U.S Non-Farm Employment Change and Unemployment change

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