EURUSD Technical Analysis – Primed for a Breakout? | Forexlive
On the daily chart below for
EURUSD, we can see that the price has tried multiple times to sustain a
breakout of the 1.1033 resistance, but until now all tries have
been unsuccessful. The buyers keep leaning on the red long period moving
average hoping that at some point the resistance will give way, but the sellers
are defending the level strongly.
The bullish momentum is weak
though as depicted by the divergence with the MACD, so the buyers will need a
strong bullish catalyst to succeed. Watch out for the red moving average
because if the sellers manage to break through, we are likely to see a big
selloff till the 1.0750 level.
On the 4 hour chart below, we can
see that the price has been trading within a rising channel. The whole rally
though was diverging with the MACD, and the price has recently broken out of
the channel.
This is generally a bearish signal,
and the price often reverses back to the bottom of the channel, which in this
case would be the 1.0750 support. Instead of falling straight
away though, the price got stuck in a range between the 1.0960 support and the
1.1090 resistance. A breakout on either side should lead to a big move
afterwards.
On the 1 hour chart below, we can
see that the strong NFP report last Friday couldn’t give
the sellers enough support for a breakout. In fact, the price bounced near the
bottom of the range and it’s now just jumping around again. There isn’t much
one can do in this environment other than waiting for a clear breakout on
either side.
This is where many traders get
chopped out. The next big event is the US CPI report tomorrow and it’s likely
that a strong report will give the sellers enough momentum to break the
support, while a weak one may give the buyers the chance to break the resistance.