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EUR/USD trades in a consolidative manner

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EURUSD traded in a consolidative manner on Wednesday, staying between the support of 1.0700 (S1) and the resistance of 1.0800 (R1). The fact that the rate stays below the 1.0800 (R1) barrier keeps the short-term bias negative in my view, and I still expect the bears to challenge the 1.0700 (S1) line. A break below that support could extend the bearish wave and perhaps target the 1.0610 (S2) line. Nevertheless, bearing in mind our momentum signals, I would stay cautious that an upside bounce could be in the works before the next leg down. The RSI continued higher and is now approaching its 50 line, while the MACD has bottomed and crossed above its trigger line. As for the broader trend, I still see a longer-term downtrend. The pair is forming lower highs and lower lows below both the 50- and the 200- day moving averages. As a result, I would treat the recovery from 1.0460 as a corrective phase of the larger down path.

• Support: 1.0700 (S1), 1.0610 (S2), 1.0550 (S3).

• Resistance: 1.0800 (R1), 1.0950 (R2), 1.1045 (R3).

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