EUR/USD: an initial pick up from $1.1100 today is encouraging for the bulls [Video]
|EUR/USD
The early trading sessions of 2020 show that the euro bulls are likely to have another tough year ahead. The recovery for the dollar in the past couple of days has pulled EUR/USD back by over -100 pips to break what looked to be an encouraging uptrend channel. We have previously talked at length about the pivot around $1.1100 and once more it is coming into play as a gauge for the market. This is effectively the mid-point of a three month range (between $1.0980/$1.1240) and a move below would begin to leave a more corrective bias once more to the range. An initial pick up from $1.1100 today is encouraging for the bulls, and helps to protect the key higher low at $1.1065. Although the market has broken the five week channel, no explicit technical breakdown (formal support) has been broken. This is why $1.1065 is important. Looking at momentum indicators there is a corrective slip but this is into an important moment. The RSI is falling a shade below 50 and MACD lines have crossed lower as Stochastics decline. Another negative candle today below $1.1100 would be a real suggestion that the bulls have lost control. For now, this is still just holding up around mid-point of the range, but the bulls are under growing pressure. Initial resistance $1.1125/$1.1130.
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