- EUR/USD failed to close above the 200-day MA for the third straight day on Monday.
- Markets are not impressed by the US-China trade truce.
- Euro bulls need weak US data to force a convincing move above the key average.
EUR/USD is operating on higher grounds but is having a tough time scaling the 200-day moving average, a barometer of long-term trends.
The pair closed well above 1.1116 on Dec. 11, confirming bullish higher lows and higher highs setup.
Since then, however, the single currency has repeatedly failed to close above the 200-day MA. For instance, Euro picked up a strong bid on Friday and jumped to a high of 1.12 only to end the day with moderate losses at 1.1118.
The pair managed to eke out 0.23% gains on Monday, despite the dismal German and Eurozone manufacturing PMIs, but again failed to close above the long-term average.
At press time, EUR/USD is trading at 1.1147, having faced rejection at the 200-day MA at 1.1152 in the Asian session.
A close above the key average is needed to bolster the bullish setup and will likely attract stronger buying pressure, possibly yielding a rise above Friday’s high of 1.12.
It is worth noting that markets are not impressed by the so-called phase-one US-China trade deal.
In fact, many, including BK Asset Management’s Kathy Lien, believe the phase one trade agreement is more of a trade truce than a trade deal. After all, contentious issues like intellectual property theft and forced technology transfers remain unresolved.
As a result, the EUR bulls will likely need a horribly weak US data to force a convincing break above the 200-day MA. The monthly US Housing Starts and Building Permits are scheduled for release at 13:30 GMT on Tuesday.
The Eurozone Trade Balance (Oct), scheduled for release at 10:00 GMT, is unlikely to move markets.
Technical levels
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