EUR/USD Technical Analysis | Forexlive
On the daily chart below, we can
see that the price has breached both the trendline and the support zone at 1.07. There’s a clear
fight between buyers and sellers as the price is consolidating near the
breakout with a bearish tilt.
The whole move from 1.02 to 1.10
was diverging with the MACD signalling a loss of momentum.
Generally, the price pulls back to the nearest support/resistance or trendline
before returning to the original trend.
When the price breaks the
trendline though, there are high chances that the price erases the entire
divergent move. This would make the 1.02 as an ultimate target for this setup.
The moving
averages are pointing south and the red long period moving average acted as
resistance along with the 1.08 handle.
On the 4 hour chart below, we can
see that the price has a bearish bias and it’s moving lower although very
slowly. We can see that the selling momentum is waning with the MACD signalling
a divergence. For now, the trendline is acting as resistance and the sellers
are leaning on it. A break to the upside would give the buyers control and we
may see another run to the 1.08 handle before finding sellers again.
On the 1 hour chart below, we can
see how the price is getting rejected by the downward trendline. The risk here
is that these continuous rejections signal an imminent breakout to the upside
as the price has now formed a bullish
flag pattern. The target on a breakout would be the 1.08
handle.
The economic data will be key for
what’s next for the pair. We are now in an environment where good news are bad
news for the pair, therefore strong economic reports should be taken as
bearish.