EUR/USD: Euro recovery loses its way [Video]
|EUR/USD
The euro recovery has just lost its way in the early part of this week. The question is whether this is the point where corrective momentum on EUR/USD builds once more. For that, the support at $1.0950 is key. This is the first key higher low of the recovery (and shows well on the hourly chart also as a pivot). The momentum of the move is also at an interesting crossroads, with the Stochastics and RSI both tailing off around 50 (their neutral points) and MACD lines also tailing off. We have already seen the sharp recovery uptrend being broken this morning, so the damage is being done to the bull move. The issue now is whether it is the renewal of the dollar strengthening move that would pull EUR/USD sharply back lower again. Support around the 38.2% Fibonacci retracement (of $1.1492/$1.0635) at $1.0965 is a key basis of support near term, just under the old November/December lows of $1.0980. This support area has supported the market initially this morning. The hourly chart shows that the bulls need to respond to the slip, with the hourly RSI again around 40 (where support has tended to form through the recovery) and MACD lines a shade below neutral. If hourly RSI moves below 30 it would be a negative signal and open the prospect of a deeper move below $1.0950 towards the 23.6% Fib around $1.0835.
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