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The EUR/USD currency pair went into the weekend near the 1.06982 level, a depth it has not traversed since the first week in June. The bearish momentum within the EUR/USD pair has continued, and it likely caused anxiety for speculators who have insisted on pursuing reversals upwards.

The lower price action of the EUR/USD pair has been sustained, and the currency pair’s penetration of the 1.07000 level late last week as well as its ability to sustain lower values were probably rather surprising for many people.

While many analysts may point to weaker European economic numbers, particularly from Germany, technical and fundamental traders should also acknowledge that a large amount of risk-averse trading and the pursuit of US Treasuries are also culprits in regards to the weakness of the EUR/USD pair.

Higher-paying yields from US bonds have been producing a profound effect on the US dollar, as it has recently gained strength across the Forex board. The lower price value of the EUR/USD duo reflects what other major currency pairs have also been experiencing.

Traders Pursuing Bearish Momentum of EUR/USD Pair Remain Steady

The EUR/USD pair demonstrated its highest values early last week, and it simply continued to erode in price as the week went along. A high of nearly 1.08090 was seen early last Monday, but the EUR/USD duo then proceeded to incrementally lose value.

On Tuesday of last week, a strong dose of price velocity downwards was seen when the EUR/USD pair hit a mark of nearly 1.07055, as US financial institutions returned from their long holiday weekend. The pair stumbled near lower depths until Thursday, when additional bearish price action developed.

Perhaps the strong lower move upon the return of US financial institutions indicates that US traders were executing a stream of orders waiting for them via their overseas counterparts. Nervous sentiment has remained a factor in recent EUR/USD trading as well as in the broad markets in general.

The inability to create an upward reversal signals that conditions have remained under bearish sentiment. Traders looking for upside price action in the EUR/USD pair may have to practice patience in the coming week.

EUR/USD Speculators Await European Data and ECB Announcement in the Days Ahead

• German ZEW Economic Sentiment will be released this Tuesday, and a negative reading is anticipated. A German 30-year bond auction will take place on Wednesday.
• The European Central Bank will announce its Main Refinancing Rate on Thursday, and no change is expected to the interest rate.

EUR/USD Weekly Outlook

The speculative price range for the EUR/USD currency pair is 1.06040 to 1.08005. Behavioral sentiment is likely going to remain the primary source of power in the EUR/USD pair this coming week. Having traded below the 1.07000 ratio, speculators will now watch early this week to see if the currency pair can recover some upward mobility and move above this level.

If the EUR/USD pair remains below 1.07000 during the first two days of the week, this could be taken as an additional sign of weakness. There have been displays of violent price velocity within the EUR/USD pair over the past couple of weeks, and this should make traders cautious.

Day traders may actually have an advantage in the current Forex markets because of their timeframe perspectives. While there are likely plenty of traders who are looking for reversals higher to eventually be seen in the EUR/USD pair over the next few weeks, this upward momentum has not yet occurred and there may be more headwinds blocking the path higher.

Traders with the ability to look for quick-hitting trades to take advantage of technical support and resistance levels while making wagers that are not anticipating massive movements might be far better positioned to pursue the EUR/USD pair under the current market conditions.

Traders who do believe the currency pair could move lower should look at six-month charts to see where it traded in the last week of May and the first week of June this year. The EUR/USD pair was able to traverse to a low of nearly 1.06350.

Nervous conditions, which are being seen in the broad markets, are making it difficult to look beyond the scope of a few days. Conservative leverage needs to be used, and traders should use stop losses to work with the EUR/USD pair as it moves near mid-term lows.

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