EUR/USD has been quite bearish recently after bouncing off the 1.1850 resistance area. The market is still quite volatile, but the price is expected to be bearish in the coming days. Despite having a hike in interest rates USD was quite weak against EUR which was recovered well enough with the positive development based on Tax Reform, yet the gain was not quite impulsive due to worse economic reports published recently. Today EUR Italian Trade Balance report is going to be published which is expected to decrease to 3.23B from the previous figure of 3.99B, Final CPI is expected to be unchanged at 1.5%, Final Core CPI is also expected to remain unchanged at 0.9% and German Buba Monthly Report which is the report of current and future economic conditions is expected to be quite neutral. On the USD side, today we have only NAHB Housing Market Index which is expected to be unchanged at 70 and Final GDP report is going to be published on Thursday which is also expected to be unchanged at 3.3%. Ahead of the Christmas holiday this week, the pair is expected to be quite corrective and experience lack of liquidity. As of the current market scenario, USD is expected to gain momentum over EUR despite any positive economic reports or events from the EUR side.
Now let us look at the technical view, the price has recently broken below the 1.1770 support level with a daily close which is expected to have a retest before price continues further down towards 1.1660 support level in the coming days. The previous bearish daily candle is also being held by the dynamic level of 20 EMA as resistance which explains the confluence of upcoming bearish move in the pair. As the price remains below 1.1850 the bearish bias is expected to continue further.
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