FX:EURUSD Euro Fx/U.S. Dollar
- The rally in the EUR/USD pair stalled at 1.0968 on Tuesday, but profit taking pushed the spot back to 1.0924. Another attempt was made to take out 1.0963-1.0964, before falling it ran into offers today and fell back to 1.0925 levels.
Consequently, we have a formation (1.0965) on the hourly chart, with the spot trading around 1.0924 (neckline).
In my opinion, the spot is poised to break below the neckline and drop to 1.0883. I hold this view since the spot also failed to take out the 50-MA on the 4-hour and the 200-MA on the hourly.
Given, the spot is ignoring the US-German 10-year yield spread, it is unlikely that the same could offer fresh cues to the pair today. The only risk to the view is the risk aversion in the , which may support the EUR; which has been behaving like a funding currency since Greek deal was reached.