Richard Perry
Independent Analyst
There has been a definite turnaround in sentiment in the past few days which has resulted in the dollar bulls regaining confidence and is dragging the pair lower. The breakdown on Friday below the key support band $1.1035/$1.1065 was a key development and confirmation of the directional change. Daily momentum indicators are conducive to a correctional play with RSI and MACD now consistently falling, whilst the Stochastics have given a “bear kiss” and also look strongly negative. I now expect the euro retreat to continue now to test key support levels. The intraday hourly chart shows the old key pivot level of $1.0900 is under direct threat, with the next pivot at $1.0800 also next in range. Near term momentum is negative, but any intraday rallies should be seen as a chance to sell now. The initial resistance is at $1.1000 from yesterday (and also around Friday’s low), however already the Europeans are coming in to sell early in the session.
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