EUR/USD Technical Analysis | Forexlive
On the daily chart below, we can
see that with all the fears around the banking sector the sellers couldn’t
break below the 1.0533 support. Recently, the Euro sold off as
fears from the US spread to Europe with Credit Suisse under pressure. The SNB the
same day offered the bank support and as happened for the US, the fears started
to dissipate and switched the sentiment from risk off to risk on.
This weighed on the US Dollar,
which is favoured when there’s a flight to safety, and the price rebounded.
Yesterday, the ECB went through with the 50 bps
hike but refrained from signalling the next move as they want to see how
everything evolves in the next weeks. In the short term this is giving the Euro
some support thanks also to the general risk on sentiment.
On the 4 hour chart below, we can
see that the 1.0533 support is a meaningful one, so a future break below that
level will be significant for the sellers. For now, the buyers seem to be in
control as the price has almost erased the entire selloff from the Credit
Suisse scare.
The buyers may want to wait for a
break above the 1.07 handle to start targeting the 1.08 resistance, which will also be the last
line of defence for the sellers.
On the 1 hour chart below, we can
see more closely the recent price action. The Credit Suisse troubles made the
price to break the rising
wedge pattern and the sellers piled in as a consequence, extending the
selloff. Then we got the bounce from the 1.0533 support and now the price is at
the 61.8% Fibonacci
retracement level of the entire downward move.
A break above, would give the
buyers more conviction for a rally towards the 1.08 resistance. The sellers may
lean on this level as the first line of defence. In case we get a pullback
towards the trendline, the buyers will lean on that
with defined risk, while the sellers will look at a break below to start piling
in looking for a breakout of the 1.0533 level.