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EUR/USD continues trendless

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EURUSD continued to trade quiet on Wednesday, still trading between the key support line of 1.1260 (S1) and the resistance of 1.1540 (R2). Today, we get the US CPI for January, which is expected to have fallen into deflation. This could push EURUSD higher, but not high enough to exit its range and give directional signals, I believe. On that account, I would hold my flat stance as far as the short-term picture is concerned. With regards to the broader trend I believe that the pair is still in a downtrend. EURUSD is printing lower peaks and lower troughs below both the 50- and the 200-day moving averages. Nevertheless, I maintain the view that only a break below 1.1260 (S1) could turn the bias back to the downside and perhaps open the way for another test at 1.1100 (S2), defined by the low of the 26th of January.

• Support: 1.1260 (S1), 1.1100 (S2), 1.1025 (S3).

• Resistance: 1.1450 (R1), 1.1540 (R2), 1.1650 (R3).

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