It's all about which one is weaker
When we are talking about EURUSD and its trend, as we know, first we have to check the Euro and USD separately first and then as a currency pair.
US Dollar index got weaker after the dovish tone of Mr. Powell in his speech, where he mentioned that he knows and FED is aware that inflation is high and can be a bit higher as well, however it is going to ease. He mentioned that we had many reasons in the past years that they hold the rates under its target and we do still have the same reasons in the market, so the situation is the same, and the FED still supporting the idea of transient inflation. And in any case, FED has all the needed tools to control it, if needed. On the other hand, employment numbers, as Mr. Powell mentioned still have some alarms. So he believes that the Labor market still needed help.
On the Euro side, earlier weaker than expected economic data from Eurozone were ignored by market participants. However, as we can see in the published data in the past week, the European economy is growing slower than expected, and it cannot support the Euro. Earlier today also the news that the European Union is set to ban non-essential travels from the United States, underperformed the Euro, as it is will hurt the tourism and travel business. Deaths number in the US caused by Covid-19 averaged over 1,200 last week.
The effect of these different forces on the chart is obvious. Technically, what we can see is that bears and bulls do have not enough encouragement to confirm themselves. OBV trend line is flat, same as price movement in the chart. Currently, the 1.1800 can be the key level, where we can confirm the up or downtrend by that. Trading stable above this level will confirm the bull's tendency, while the failure to pass this level, will hold the bears for a longer time in the chart.
