EURUSD Forms Dangerous “Death Cross,” Warns PrimeXBT Analyst Kim Chua
The euro versus dollar trading pair has formed an ominous signal called a “death cross,” according to lead PrimeXBT analyst Kim Chua.
Unless a sharp recovery arrives, the analyst says that there very well could be more downside imminent in the trading pair.
Euro Death Cross Against The Dollar: What This Means
The EURUSD pair has formed a “death cross,” suggesting much more significant chances of lower prices in the coming days and weeks ahead. A death cross occurs when a short-term moving average like the 50-day MA crosses over a longer-term moving average such as the 200-day MA.
PrimeXBT analyst Kim Chua explains that the death cross itself simply reflects that traders have been more inclined to sell and could stay that way for the foreseeable future. Adding more danger to an already deadly situation for EURUSD, the death cross has occurred on both simple and exponential moving averages, each of which uses unique calculations.
Fundamental Factors Back-Up Bearish Currency Technicals
The duo of moving averages suggests growing bearish sentiment toward the euro versus the dollar. Friday’s better-than-expected payroll numbers out of the United States also gave the dollar a boost of strength, putting any chances of a recovery on the euro-dollar pair to rest.
The ECB’s recent more dovish stance and continued negative interest rates have made shorting the euro against other currencies with central banks that take more hawkish views a potentially profitable play due to the falling euro exchange rate.
Technically speaking, Chua also adds that the EURUSD chart is looking increasingly precarious, with price targets of $1.16 and $1.12, respectively if the first zone doesn’t hold as support. With weak market structure, a death cross, and poor fundamentals, euro woes might only be beginning, Chua concludes.
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