Following a rather still morning, the Euro hit the 55-hour SMA at 1.14 mid-Friday and consequently accelerated 132 pips until Tuesday morning when EUR/USD tested the weekly R2 near 1.1550.
This strong appreciation pushed the rate out of two channels, the most senior of which was formed mid-July. It is likely that the Euro tries to make a retracement from the breached one-month channel. The same bearish signals are given by technical indicators which should ease a bit from the overbought territory.
Today’s downside target is the breached channel line, the 55-period (4H) SMA and the 50.00% Fibonacci retracement at 1.1460. In case of a surge, bullish gains are unlikely to exceed the monthly S1 at 1.1580. This move north should then be followed by a price decline down to the aforementioned area.
This strong appreciation pushed the rate out of two channels, the most senior of which was formed mid-July. It is likely that the Euro tries to make a retracement from the breached one-month channel. The same bearish signals are given by technical indicators which should ease a bit from the overbought territory.
Today’s downside target is the breached channel line, the 55-period (4H) SMA and the 50.00% Fibonacci retracement at 1.1460. In case of a surge, bullish gains are unlikely to exceed the monthly S1 at 1.1580. This move north should then be followed by a price decline down to the aforementioned area.
Comment:
EUR/USD did not gain major positions in any direction on Wednesday, as the mid-session advance north was already erased by the end of the day.
The rate managed to re-test the upper channel line and the 1.1620 level prior to falling down to the 55-hour SMA near 1.1560 this morning. Technical indicators have already started to edge slightly lower, suggesting that the bearish momentum could accelerate.
Given that no significant data releases are scheduled, the Euro could remain rather stable today in between the monthly S1 and S2 at 1.1580 and 1.1470, respectively. Further fall is unlikely due to the area being reinforced by the 200-hour SMA.
Meanwhile, the senior channel and the monthly PP are located near the 1.1660 mark.
EUR/USD did not gain major positions in any direction on Wednesday, as the mid-session advance north was already erased by the end of the day.
The rate managed to re-test the upper channel line and the 1.1620 level prior to falling down to the 55-hour SMA near 1.1560 this morning. Technical indicators have already started to edge slightly lower, suggesting that the bearish momentum could accelerate.
Given that no significant data releases are scheduled, the Euro could remain rather stable today in between the monthly S1 and S2 at 1.1580 and 1.1470, respectively. Further fall is unlikely due to the area being reinforced by the 200-hour SMA.
Meanwhile, the senior channel and the monthly PP are located near the 1.1660 mark.
Despite flashing bearish signals, EUR/USD failed to halt at the weekly R1 on Tuesday. The Euro did remain near this level during the morning session, but was then pushed higher by a strong three-hour surge up to 1.16. As a result, the total gain for the day was 100 pips.
As apparent on the chart, the Euro has been reluctant to move past the given psychological level. This means that the expected decline is likely to happen today. Technical indicators are starting to edge lower which is also a bearish signal. The nearest support is the 55-hour and 100-period (4H) SMAs and the weekly R1 circa 1.15.
In case fundamentals cause high volatility in the market, the Euro might even target the 200-hour SMA at 1.1420. In terms of upside potential, the senior channel is located at 1.1660.