On Thursday the EUR/USD pair fell to a new 22-month low. Today, the Euro is moving in a narrow range. The Euro continued to decline as fears of growth prevailed among investors, and concerns about the state of the German economy after a poll conducted on Wednesday showed that the morale of German business was falling. Investors are turning to the dollar as a safe-haven currency following the increased global economic risks.
The dollar is increasing for a variety of reasons. The actions of the ECB are extremely inefficient, and the economic indicators in the European Union are worse than the American ones. The market is likely to continue to move to 1.11, and then to an even more important level of 1.10, which is not only psychologically but also structurally important.
EUR/USD technical analysis
The Euro declined steadily after it failed to clear the 1.1250 resistance against the US Dollar. The EUR/USD pair traded below the 1.1210 and 1.1185 support levels to move into a bearish zone.
The pair even broke the 1.1150 support and settled below the 50 hourly simple moving average. A swing low was formed at 1.1117 and the pair is currently consolidating losses inside a contracting triangle with resistance at 1.1140.
On the upside, there is a strong resistance formed near the 1.1160 level, the 50 hourly simple moving average, and the 50% Fib retracement level of the last decline from the 1.1209 high to 1.1117 low.
Therefore, a decent recovery in EUR/USD towards the 1.1160 level is likely to face strong resistance. On the downside, initial support is near the 1.1120 level, below which the price could test 1.1100.