The single European currency grew up versus the dollar on yesterday’s trading. At the same time, the investors did not actually pay attention to the evidence of the price pressure, continuing to fall in the EU, which is fraught with the deflation advent.
To continue the downward trend, the sellers need to break the support level 1.3760. If this happens, the way to the next support level - 1.3710 - 1.3690 will be opened.
To grow the pair needs to break through 1.3800. Still we do not believe in this scenario as bulls’ power is exhausting. We expect downward movement resumption.
The euro declined versus the dollar, which could be the balance moods consequence, caused by M. Draghi’s statements and other the ECB members’ concerns about the euro high rate, as well as multi-directional results indicators, the publication issued to EU statistics. However, the reports from the United States helped to neutralize the euro losses and to close trading at nearly opening prices. The Euro zone economic news was not enough, and the most significant was the ZEW institute report for April
The EURUSD attempted to push higher yesterday topped at 1.3878. The bias is bullish in nearest term testing 1.3900 before testing 1.4000. Immediate support is seen around 1.3835. A clear break below that area could lead price to neutral zone in nearest term testing 1.3800 – 1.3780. The ascending triangle bullish scenario on daily chart remains valid and I still prefer a bullish scenario at this phase.
EURUSD continues to trade in a near-term sideways range. However, the 200-day average at 1.3671 continues to cap and while below here and more importantly 1.3689/90 – the June high and 38.2% retracement of the May/June decline – the trend can stay bearish for now. Support shows at 1.3566/64 initially. Removal of 1.3548 targets 1.3513/03, with more important levels at 1.3477/71 – trendline support and the early year low. Above 1.3690 would see a base established, opening the door to a recovery back to 1.3721/23 initially.
Strategy: Flat. Sell strength to 1.3665/75, stop/reverse above 1.3690. Take profit at 1.3480.
EURUSD strength remains unable as yet to clear the falling 55-day average, currently at 1.3697. This remains seen as the barrier to a deeper recovery to aim at half the May/June fall and “neckline” resistance at 1.3735/48, which we look to cap. Above would target the “neckline” to a further top at 1.3775, and with the 61.8% retracement not far above at 1.3806, we would look to provide a fresh ceiling. Below 1.3640 is needed to aim back at 1.3576/64. Removal of this here should then see a move towards 1.3513/03, with scope for more important level at 1.3477/76 – trendline support and the early year low.
Strategy: Long, stop below 1.3640, for 1.3775.
EUR/USD’s rejection of price from the 55 day ma at 1.3693 has been quite emphatic and reinforces my view that the market has topped here at 1.3701. The 20 day ma at 1.3605 should offer only minor support en route to the much more important 1.3503 recent low and the 1.3482 2012 -2014 uptrend. This remains the key break down point to 1.2750. Although the 200 week ma at 1.3420 and the 1.3395 55 month ma may offer some interim supports on the way. Only above 1.3701 will alleviate immediate downside pressure for a deeper retracement to 1.3807 (61.8% retracement). I will attempt to trade from the short side while below here. My longer term view remains bearish.
Today’s ECB meeting should not be a reason for anyone to postpone vacation plans or to change preparations for the next round of World Cup matches in Brazil. Following the June fireworks, I think the ECB to take it easy. It will probably take until the end of the year before the June measures show any significant impact on lending. I expect the calm after the storm to last for quite some time.
EURUSD remains under pressure after last week’s rejection of the falling 55-day average, currently seen at 1.3684, and the subsequent completion of a small top below 1.3640 keeps us bearish for 1.3576 next, below which can aim at “neckline” support at 1.3513/03, with scope to more important levels at 1.3487/77 – trendline support and the early year low. A break of this level is needed to compete a large “bear wedge” pattern, and now also a further top, warning of further significant weakness to 1.3248 initially. Near-term resistance moves to 1.3603/13, above which can see a recovery back to 1.3640/42, and potentially 1.3665.
[B]Trade Idea[/B]: Sell strength to 1.3630/40, stop above 1.3665. Take profit at 1.3513/03.
EURUSD’s fall last week left price action near-term stretched and has seen a small bounce off the lows. However, I view strength as corrective and, with a small top below small 1.3640 still in place, I stay bearish. Removal of “neckline” support at 1.3513/03 would aim at more important levels at 1.3487/77 – trendline support and the early year low. A break of this level is needed to compete a large “bear wedge” pattern, and now also a further top, warning of further significant weakness to 1.3248 initially.
Near-term resistance remains at 1.3613, above which can see a recovery back to 1.3640/42, and potentially 1.3665.
[B]Trade Idea[/B]: Sell strength to 1.3630/40, stop above 1.3665. Take profit at 1.3513/03.
The EUR/USD formed a positive day reversal while waiting for Yellen’s comment but not only, because also Draghi could support some volatility today! Only a daily closing tonight above 1,3290 will support a s/t bottom. The indicators of the daily chart are still well negative but recovering while those of the s/t charts are showing a mixed picture this morning suggesting some consolidation/ correction. While above 1,3270 on an hourly closing we expect a 1,33 overshooting with the 200 hours line at 1,3343 the possible attraction. Already an hourly closing above 1,3285 at 7.00 CET will support an extension of the move up. We’re still long (1.3248 sm) since yesterday and put now a stop just in case a 1,3235 while waiting for a 1,3330 overshooting
The EUR/USD confirmed a weak daily, weekly and monthly closing on Friday supporting further weakness.
The indicators of the m/t charts are all well negative supporting further weakness; we have however oversold conditions that could favour a rebound but again, we’re missing any signal suggesting an action. The indicators of the s/t charts are also negative with further bullish divergences confirming a negative tone.
daily chart are still well negative as well as those of the s/t ones supporting further weakness.
Possible rebounds should find resistance at 1,3160 before the 200 hours line at 1,3209!!
The pair confirmed this morning a small reversed S_H_S formation in the hourly chart starting a small correction that should confirm a test of the 200 hours line at 1,3172!! The closing last night was also positive forming a positive day reversal. Only a daily closing tonight above 1,3138 will confirm a s/t bottom! The indicators of the daily chart are still well negative and oversold but those of the s/t charts are positive supporting a rebound. An hourly closing above 1,3145 will support the extension of the rebound!
EUR/USD chart has experienced a strong descending trend during the recent months that could record the bottom price of 1.23573.According to the recent strong descending, price is in saturation sell area and there is the potential for ascending and price reformation.As it is obvious in the picture below, there is a none harmonic butterfly pattern between the bottom price of 1.23573 and the top price of 1.28854 that there is a potential for changing price direction from D point of this pattern.
Stoch indicator is in saturation sell area and confirms the D point of this pattern by the next cycle and warns about the potential of ascending of the price during the next candles. Generally until the price level of 1.23573 is preserved, the price has the potential for ascending and reformation.
Trading View: EURUSD confirmed a further weak closing on Friday making a new low in the daily as well as in the weekly chart supporting further weakness. The drop failed yet to confirm our m/t target that we expect to see very soon! We still expect the EURUSD to deep below 1,20 before end of the year with 1,1321 the possible target in the coming weeks!
I recognize that the 1.10 level above is still resistive, so therefore it’s difficult to take a longer-term trade. In fact, I are comfortable with longer-term trades until we are well above the 1.15 level.
Crossing to the bullish side of the uptrending angle at 1.0960 will put the EUR/USD in an extremely strong position. This could trigger a further rally into the downtrending angle at 1.0995. This is the last potential resistance before the 1.1035 main top.
1 month trend line resistance at 1.1000 is the first challenge for bulls & push higher meets April highs at 1.1025/35 but the main challenge for bulls today is at 1.1040/50. A break higher however is a positive signal & sees 1.1050/40 act as support to target 1.1110/15.
