Richard Perry
Independent Analyst
I have been focusing on this technical rally on the euro for the past couple of days but over the past 24 hours the bulls appear to just have run out of steam. The resistance of the six week downtrend is intact (today at $1.1460), whilst he daily momentum indicators are still suggesting this is a bear market rally that is struggling to gain traction. The chart shows the RSI having unwound back towards 30 and the MACD lines have settled but remain in negative configuration. There is still the curious position of the Stochastics rising at a one month high, but this is still the only signal improving on the daily chart. Intraday, the base pattern on the hourly chart is coming under pressure as the rate has fallen back below the neckline at $1.1295, whilst hourly momentum is also deteriorating. The euro has been sold since the announcement of the FOMC statement, which has now left resistance at $1.1370, coming under Tuesday’s high at $1.1422. For now we are getting mixed signals from the intraday chart but the bigger picture suggests the euro remains a sell into strength. For now the intraday base pattern remains in play as a reversal until a breach of the support at $1.1320, but its influence is waning.
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