The pair failing to accelerate mid-Tuesday following a bullish breakout from the 55– and 100-hour SMAs was an early indication of a soon weakening of EUR/USD.
This scenario was fulfilled yesterday when the Euro lost 78 pips against its American counterpart and fell below the previous 2018 low of 1.17.The given fall was stopped by the weekly S1 located at 1.1685. It is likely that the Euro tries to approach the aforementioned SMAs near 1.1760 during the following hours.
Given that they have restricted effectively any attempts to accelerate during the past week, this area is unlikely to surrender today (except if fundamental events cause a strong surge north up to 1.18).
Technical signals still remain bearish, thus suggesting that today’s target should be the weekly S2 at 1.16.
This scenario was fulfilled yesterday when the Euro lost 78 pips against its American counterpart and fell below the previous 2018 low of 1.17.The given fall was stopped by the weekly S1 located at 1.1685. It is likely that the Euro tries to approach the aforementioned SMAs near 1.1760 during the following hours.
Given that they have restricted effectively any attempts to accelerate during the past week, this area is unlikely to surrender today (except if fundamental events cause a strong surge north up to 1.18).
Technical signals still remain bearish, thus suggesting that today’s target should be the weekly S2 at 1.16.
Comment:
The 55-hour SMA was the main driving force for EUR/USD on Friday, thus allowing bears to continue dominating in the market. The rate reached a new six-month low of 1.645 mid-session.
Strong upside momentum for the Euro was provided by Italian politics which brought back some optimism in the given currency. At the time of this analysis, the pair had surpassed the 55-hour SMA and was testing the 100-hour SMA near 1.1725.
The pair is generally expected to recover this week, so this moving average and the nearby-located 200-hour SMA should be surpassed. Today’s target is the 1.18 mark. However, it should likewise be noted that the Euro remains exposed to political developments in Italy that could have negative impact on the pair negatively, resulting in a fall down to the monthly S3 at 1.16 today.
The 55-hour SMA was the main driving force for EUR/USD on Friday, thus allowing bears to continue dominating in the market. The rate reached a new six-month low of 1.645 mid-session.
Strong upside momentum for the Euro was provided by Italian politics which brought back some optimism in the given currency. At the time of this analysis, the pair had surpassed the 55-hour SMA and was testing the 100-hour SMA near 1.1725.
The pair is generally expected to recover this week, so this moving average and the nearby-located 200-hour SMA should be surpassed. Today’s target is the 1.18 mark. However, it should likewise be noted that the Euro remains exposed to political developments in Italy that could have negative impact on the pair negatively, resulting in a fall down to the monthly S3 at 1.16 today.
Comment:
Bears took over the market on Monday, driven by political turmoil in Italy. As a result, the Euro weakened 1.00% against its American counterpart and thus had reached the 1.1607 level by mid-day. The remaining part of that session was spent with low volatility.
From technical point of view, the pair should recover both today and this week. The nearest resistance area is the 55– and 100-hour SMAs circa 1.1680, while the upper channel line and the 220-hour moving average are located near the 1.1750 area.
Nevertheless, fundamental developments in Italy are likely to drive this currency pair for the following trading sessions. In case of negative news, the bearish impact should push the pair down to its 6-1/2-month low or even the weekly S2 at 1.1550 and 1.1525, respectively.
Bears took over the market on Monday, driven by political turmoil in Italy. As a result, the Euro weakened 1.00% against its American counterpart and thus had reached the 1.1607 level by mid-day. The remaining part of that session was spent with low volatility.
From technical point of view, the pair should recover both today and this week. The nearest resistance area is the 55– and 100-hour SMAs circa 1.1680, while the upper channel line and the 220-hour moving average are located near the 1.1750 area.
Nevertheless, fundamental developments in Italy are likely to drive this currency pair for the following trading sessions. In case of negative news, the bearish impact should push the pair down to its 6-1/2-month low or even the weekly S2 at 1.1550 and 1.1525, respectively.
Comment:
Political uncertainty in Italy continues to weigh heavily on the common European currency. Despite starting the day with low volatility on Tuesday, bears grew in strength mid-session and consequently pushed the pair 88 pips lower.
This fall was stopped by the weekly S2 at 1.1525. This level is likewise a new ten-month low for the rate.
Technical indicators are located in the oversold territory. This should point to a soon recovery. However, it seems that the given political uncertainty is dominating over any technical signals this week, suggesting that the pair might still edge lower down to the bottom channel line or the weekly S3 at 1.1460 and 1.14, respectively.
In terms of resistance, the Euro faces the 55– and 100-hour SMAs circa 1.1620. This level should not be surpassed in this session.
Political uncertainty in Italy continues to weigh heavily on the common European currency. Despite starting the day with low volatility on Tuesday, bears grew in strength mid-session and consequently pushed the pair 88 pips lower.
This fall was stopped by the weekly S2 at 1.1525. This level is likewise a new ten-month low for the rate.
Technical indicators are located in the oversold territory. This should point to a soon recovery. However, it seems that the given political uncertainty is dominating over any technical signals this week, suggesting that the pair might still edge lower down to the bottom channel line or the weekly S3 at 1.1460 and 1.14, respectively.
In terms of resistance, the Euro faces the 55– and 100-hour SMAs circa 1.1620. This level should not be surpassed in this session.
Comment:
Fundamental news drove the common European currency higher on Wednesday, thus allowing it to recover from the ten-month low of 1.1525. This 130-pip surge resulted in a breakout of several resistance levels, including the 55– and 100-hour SMAs.
By Thursday morning, the pair had steadily approached the 200-hour SMA and the upper boundary of a seven-week channel circa 1.17. Given that this resistance area is likewise strengthened by the 55-period SMA on the 4H chart, the Euro might be reluctant to overcome this level on the first occasion.This mark, however, should eventually surrender and send the pair towards the 1.19 territory.
In case no fundamentals shake the market today, a fall below the 55-hour SMA and the weekly S1 at 1.16 is not expected.
Fundamental news drove the common European currency higher on Wednesday, thus allowing it to recover from the ten-month low of 1.1525. This 130-pip surge resulted in a breakout of several resistance levels, including the 55– and 100-hour SMAs.
By Thursday morning, the pair had steadily approached the 200-hour SMA and the upper boundary of a seven-week channel circa 1.17. Given that this resistance area is likewise strengthened by the 55-period SMA on the 4H chart, the Euro might be reluctant to overcome this level on the first occasion.This mark, however, should eventually surrender and send the pair towards the 1.19 territory.
In case no fundamentals shake the market today, a fall below the 55-hour SMA and the weekly S1 at 1.16 is not expected.
Following two days of decline which started on Tuesday, the Euro tried to regain some of the lost positions yesterday. This appreciation, however, was not long-lived, as the combination of the 55– and 100-hour SMAs continued to provide an unbreakable resistance for the pair.
During the last week, the pair has diminished its trading range within a six-week descending channel, thus forming a junior wedge. It is expected that this pattern is eventually breached to the upside, so that the rate could test the senior pattern and the 200-hour SMA near 1.1780. This means that the 55– and 100-hour SMAs should eventually be surpassed.
It is likely that these lines still provide strong resistance today prior surrendering early next week.