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EUR/USD slightly below the resistance of 1.1315

IronFX UUIIFXBR
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EUR/USD edged higher yesterday and is currently trading slightly below our resistance hurdle of 1.1315 (R1). Our short-term momentum studies suggest that the rebound may continue for a while. A break above the 1.1350 (R1) obstacle is likely to prompt extensions towards the 1.1460 line, defined by the low of the 16th of January. Nonetheless, since the rate is trading below the black downtrend line, the short-term path remains negative in my view and I would treat yesterday’s rebound, or any extensions of it, as a corrective move before the next leg down. The broader trend is to the downside too. The pair is printing higher peaks and higher troughs below both the 50- and the 200- day moving averages. Therefore, I would expect sellers to eventually take control in the not-too-distant future and drive the battle below 1.1100 (S1). Such a move could see scope for extensions towards the next support zone of 1.1025 (S2), the inside swing defined by the high of the 1st of September 2003.

• Support: 1.1100 (S1), 1.1025 (S2), 1.1000 (S3)

• Resistance: 1.1315 (R1), 1.1460 (R2), 1.1540 (R3)

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