Thursday’s session was market by strong upside momentum that allowed the common European currency to appreciate 96 pips against the Greenback.
The morning was spent with low volatility that seemed to point to a period of consolidation. However, a test of the weekly PP was followed by a notable surge up to the 1.2516 mark as a result of which the Euro surpassed 1.25 and formed a new 1,5-year high.
Bulls might still succeed at pushing the rate slightly higher; however, the weekly R1 at 1.2573 is unlikely to be breached. The base scenario favours the rate approaching the support area formed by the 55-, 100– and 200-hour SMAs in the 1.2450/00 range. Meanwhile, the following week might mark a breakout of this cluster and a subsequent fall.
The morning was spent with low volatility that seemed to point to a period of consolidation. However, a test of the weekly PP was followed by a notable surge up to the 1.2516 mark as a result of which the Euro surpassed 1.25 and formed a new 1,5-year high.
Bulls might still succeed at pushing the rate slightly higher; however, the weekly R1 at 1.2573 is unlikely to be breached. The base scenario favours the rate approaching the support area formed by the 55-, 100– and 200-hour SMAs in the 1.2450/00 range. Meanwhile, the following week might mark a breakout of this cluster and a subsequent fall.
Comment:
Contrary to expectations, the common European currency was dominated by bearish market on Monday.
Following a minor period of consolidation between the 55– and 100-hour SMAs, the pair breached the latter together with the 200-hour SMA a few hours later. This strong downside momentum resulted in the pair testing the weekly S1 and the bottom boundary of a two-month channel circa 1.2350 by Tuesday morning.
Converging technical indicators suggest that the pair should recover some losses in this session. Gains, however, are expected to be limited due to the combined resistance of the 200-, 100– and 55-hour SMAs and the weekly PP located near the 1.2440 mark.
A reversal from the weekly S1 would likewise confirm a newly-formed ascending channel (dashed lines).
Contrary to expectations, the common European currency was dominated by bearish market on Monday.
Following a minor period of consolidation between the 55– and 100-hour SMAs, the pair breached the latter together with the 200-hour SMA a few hours later. This strong downside momentum resulted in the pair testing the weekly S1 and the bottom boundary of a two-month channel circa 1.2350 by Tuesday morning.
Converging technical indicators suggest that the pair should recover some losses in this session. Gains, however, are expected to be limited due to the combined resistance of the 200-, 100– and 55-hour SMAs and the weekly PP located near the 1.2440 mark.
A reversal from the weekly S1 would likewise confirm a newly-formed ascending channel (dashed lines).
EUR/USD lacked volatility on Friday morning, as it remained located relatively close to the 1.25 mark. This situation changed mid-session when solid US employment data strengthened the Greenback against major currencies, including the Euro. The pair was subsequently trading sideways, as the 55– and 100-hour SMAs bounded the Euro from both sides.
In terms of patterns, the rate breached a short-term trend-line mid-Friday and continued to trade in a new junior channel. This steep formation, however, should not hold any longer, as strong upside momentum is unlikely today.
The Euro is expected to find support near the 100– and 200-hour SMAs and the weekly PP circa 1.2430 and cap its gains around the 2015/17 high of 1.2540.