Morning Market Update – EUR/USD

Intraday bias in EUR/USD remains on the downside as the pair has been unable to close above 1.1770 short term top. At this point, we’d expect strong resistance to bring the price back below the resistance level. With resistance looking stronger and holding, there are signals indicating that the pair may see some correction. Otherwise, more consolidation would be seen in near term.

Meanwhile, sustained rejection of 1.1770 would bring deeper pull back to retracement at 1.1669.

Looking at the bigger picture, an important top was formed at 1.1770. A sustained break will pave the way to key support level at retracement of 1.16697. While the rise above resistance is weak, there is no confirmation that it’s developing into a long term up trend yet. Hence, we’ll be cautious about the strong resistance from current levels to limit the upside movement. But for now, medium term outlook will remain bearish as long as resistance holds, in case of pull back.

The pair has been rejected once more. The dollar remains under pressure as the market continues to fall away. The down-days are characterized by strong bear candles, whilst any recovery up days are beset with struggles to make any headway and turn in effect into consolidation days. The recent candle showed another consolidation where the bulls failed to make any sustainable impact, before once more resuming the decline overnight. The daily momentum indicators have all now taken on a corrective outlook, with the Stochastic both falling above 50. The pair is now back into the old pivot band, so it will be interesting to see the reaction. The likelihood is that the resistance which has often been seen as an inflection point will now be tested. The four hourly chart shows the resistance is bolstered now as a key level, with initially an area of near term overhead supply.

The EUR/USD pair shows a slight bearish bias since yesterday after touching the 1.1770 level, fluctuating around the previously breached main bullish channel’s resistance. Taking a deeper look at the intraday bias, we find that the current decline is confined inside a bullish pattern that appears on the four-hour chart, which means that the rejected 1.1770 will activate the decline effect of this pattern followed by leading the price to resume the main bearish trend.

Therefore, we will keep our expectations of the main bearish trend in the upcoming period and holding below it, reminding you that our waited positive targets begin at 1.16697 and extend to 1.16108 after been rejected at the previous level.

Expected trading range for today is between 1.16697 support and 1.1840 resistance.

Expected trend for today: Overall Bearish

 
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