EUR/USD Reverses from Weekly Peak, Recording First Daily Loss in Three
[[EUR/USD]] is undergoing a reversal from its weekly peak, resulting in its initial daily decline in a span of three days as it hovers around 1.0860 ahead of the European session on Wednesday. This movement signifies traders’ positioning in anticipation of significant German and US data releases. The turnaround stems from the convergence of the 100-day Simple Moving Average (SMA) and a descending resistance line originating from mid-July.
It’s important to emphasize that the retreat of the Relative Strength Index (RSI) (14) coincides with the probable softening of German inflation indicators, both of which are impacting EUR/USD prices negatively.
However, for the pullback to gain credibility, it necessitates validation through the forthcoming US data and confirmation from a rising support line established over the past three weeks, situated near 1.0770.
Subsequent to that, a decline toward the low reached in May, around 1.0635, becomes a plausible scenario.
Should the EUR/USD bears maintain control below 1.0635, attention would shift towards the annual bottom recorded in March, located at approximately 1.0515.
Conversely, a successful breakthrough above the resistance confluence at 1.0890, formed by the 100-SMA and a descending resistance line from July 18, may lead to an upward move targeting the preceding weekly high of about 1.0930. Furthermore, the 50% Fibonacci retracement level of the upside observed from May to July, near 1.0955, could serve as the next potential target.
Should bearish momentum persist beyond 1.0955, the spotlight would then shift to the 200-day SMA level at around 1.0980, followed by the psychological level of 1.1000
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals