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After a fundamentally turbulent week for the EUR/USD fueled by yet again, a dominating NFP performance in favor of the US dollar, our team sees further weakness to transpire until the end of this year’s 3rd quarter. Fundamentally speaking, the ECB has been holding back and staying on the sidelines when it comes to raising interest rates while the Fed has been doubling down in basis points increase. The mere rate differentiation between the two paves way to an obviously unattractive Euro for big investors. Furthermore, by the time ECB increases their rates in July, the Fed would have very likely increased their basis point by 50 again. So yes, a dead and bearish Euro is what we have.

Technical AnalysisLooking at the monthly time frame, we could see that the entire narrative for EURUSD’s movement is heavily bearish. Just recently, price has broken previous monthly lows and has shown no restraint or any sort of bullish action upon reaching the lows. WIth so, our team is expecting price to tap into the external liquidity situated just below the 2017 low. In the daily timeframe, we’ve seen price react from the 38.2% retracement level and form relatively equal lows. From an intraday perspective, we are expecting a possible retracement to the 50% fibonacci level as it goes in confluence with the consolidation area as labeled by the white box.  Looking deeper to the 4 hour timeframe, with the general perspective of price going further down, we see two scenarios for the next week. Number 1, taking a look at the white line, it is possible for price to continue to impulse further down just by respecting the demand chain formed by the 38.2% retracement level. Other than that, we could also see price taking an alternative route of smashing through the demand chain and fulfilling a full retracement to the 50%  level and creating another impulse down completing an ICI sequence.