With the US opening, the EUR/USD saw an impressive 90 pips bounce from a fresh yearly low set at 1.2161. Reasons? No much as news pages struggle to justify the spike. In fact it has been pretty weird and out of nowhere, yet again, attention should be focused on charts. Take a look at current 4 hours one: the recovery stalled for now around a strongly bearish 20 SMA at current levels, while he correction from fresh low is still shy of the 23.6% retracement of the daily fall from 1.2692 posted late June; indicators are still heading south in negative territory, which suggest buyers are still not in control. With the week approaching to an end, not much could be expected, and the most likely scenario is a consolidation between 1.2210 area, and 1.2256 high. But overall, nothing suggest the bearish trend is over: daily indicators are still heading lower, and short covering is part of the game ahead of the weekend.
Short term, pair needs to break above either extreme to maybe move 30 pips one way or the other before the day is over, although seems pretty much unlikely. Longer term, price needs to extend beyond 1.2280 to be able to correct higher, with 1.2360 area then at sight, while the main support is the still untouched, 1.2140 price zone: below this last expect selloff to resume with 1.1870 as probable target.View Live Chart for EUR/USD