78% Retracement In Play For The EUR/USD
Shain Vernier • 1 min read
The past two sessions have been tough for backers of the EUR/USD. Rates have consistently slid south, with the pair losing more than 50 pips and falling beneath the 1.1000 psyche barrier. For now, it appears that a dovish ECB and Brexit tensions have prompted investors to take a bearish stance toward the Euro.
During the overnight, a collection of sub-par metrics from the Eurozone was released to the public. The Markit Manufacturing PMI for both Germany and the rest of the E.U. came in lower than expected. This news has furthered concerns about the economic health of the region and global performance. While not a traditional market mover, the lagging Markit reports have fueled the buzz over a pending global slowdown and a potential recession.
EUR/USD Falls Beneath 1.1000, Tests Downside Support
In a Live Market Update from last Friday, we broke down two key support levels for the EUR/USD that were likely to come into play early this week. If you missed the article, feel free to check it out here.
Thus far, we have seen a hard test of the 78% Fibonacci support level at 1.0960. Bargain hunters stepped in at this level, bidding rates north by 20+ pips.
Here are several levels to be aware of as we roll into the Tuesday session:
- Resistance(1): Daily SMA, 1.1036
- Support(1): 78% Current Wave, 1.0960
- Support(2): Daily Double Bottom, 1.0926-7
Overview: This week’s U.S. economic calendar is sparsely populated until Thursday’s release of Q2 GDP. With a lack of fundamental market drivers, the EUR/USD may be in a position to rotate between the 1.1000 and 1.0925 levels. The key level to watch is the 78% Current Wave Retracement at 1.0960. If this area of support is taken out, a swift test of the daily Double Bottom (1.0926-7) is very likely to develop.