Morning Market Updates – EUR/USD

EUR/USD recovers after drawing support from 1.1691 and the intraday bias is turned upside again, a short term top is formed at 1.17685 on the four-hour chart. Further correction is expected as long as 1.1691 holds. Below 1.1691 minor support, the bias might turn to the downside for 1.1662. We’d expect strong support at current levels to bring rebound.

Looking at the bigger picture, an important bottom was formed at 1.1691. A sustained break of 1.1721 will pave the way to key level retracement at 1.1768. While the rise from 1.1691 is strong, there is no confirmation that it’s developing into a long term uptrend yet. Hence, we’ll be cautious on the strong resistance at 1.1768 to limit upside. But for now, medium term outlook will remain bullish as long as the 1.1691 support holds, in case of pull back.

The renewed dollar weakness has once more enabled the bulls to hang on to the support area. This support area has proved time and again that the area can be considered as a strong hold for the pair, since it has never been broken on a closing basis. With the market ending with a positive close yesterday there is now a band of support that has been formed at this area. Although there have been further marginal gains thus far, the threat of a breach has not yet gone away and the bulls will now be looking to push back above the high of 1.1721. This phase of trading over the past couple of sessions has turned into a consolidation and is one which looks to be a move to allow the bulls to recharge for the next push higher. Near term corrections remain a chance to buy.

The EUR/USD pair keeps its stability above the key support 1.1691 after its attempts to break has been unsuccessful thus far, which makes us continue with our bullish until now. The minor bullish channel that appears on the four-hour time frame forms a potential continuation of the bullish pattern. Thus, breaching the 1.1721 resistance represents that the pair has activated the positive effect.

Therefore, the price is partially confirmed to breach one of the above mentioned levels to detect the next targets clearly. Breaching the resistance will push the price to resume the main bullish trend again, starting the positive targets at 1.1768 and extending to 1.1792, while breaking the support will push the price to extend the bearish correction, with the next correctional target located at 1.1662.

Expected trading range for today is between 1.1662 support and 1.1768 resistance.

Expected trend for today: Sideways

 
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