EUR/USD Technical Analysis | Forexlive
On the daily chart below, we can
see that the price has again rallied back to the 1.07 handle. This is a key resistance zone and the test comes as the moving
averages get closer and threaten to cross upwards if the buyers manage to push
the price above the 1.07 resistance.
The price started to rally after
the hot ISM
Services PMI, which may indicate that it’s not supported by
fundamentals and thus could be just a squeeze. The sellers will need to defend
this zone as a break above would give more conviction to the buyers.
This week we have Fed Chair Powell
testimony and the NFP report. The sellers should gain control in case the NFP
comes out hot, but in case it doesn’t, the buyers may have the strength to
break above the 1.07 level.
On the 4 hour chart below, we can
see that the rally back towards the 1.07 zone may have created a double
top within a
bearish trend. A double top is a reversal pattern, but it can be a continuation
one if it forms within a trend.
Of course, to be confirmed, the
price would need to break the neckline at 1.0576, but it’s likely that
fundamental catalysts or a break below the trendline would be enough for the sellers
to pile in in expectations of the breakout and new lower lows. The big target
for the sellers remains the 1.05 support and only a break below would
open the door for the main 1.02 target.
On the 1 hour chart below, we can
see that the buyers are still in control as the moving averages are clearly
crossed to the upside and are supporting the uptrend. The violet trendline
should be the first line of defence for the buyers as a break below would
signal a shift to more bearish momentum and the moving averages would cross to
the downside confirming the new trend.
In case the price breaks below
the trendline, the sellers should start to eye the blue trendline and then the
low at 1.0533. The blue trendline will be the last line of defence for the
buyers.