EUR/USD outlook: Daily chart points to persisting downside risk
|EUR/USD
EURUSD edged higher in early Monday, driven by fresh risk appetite, after Friday’s US labor data signaled that the Fed might be done with hiking interest rates.
Fresh gains emerge after a multiple failure to register clear break through Fibo support at 1.0786 (76.4% of 1.0635/1.1275) and facing a minimum requirement in clearing 200DMA (1.0817) to ease existing downside risk and to allow for stronger recovery.
Near-term action remains within the range, limited at the upside by 100DMA (bull-trap) and weighed by thick daily cloud, base of which lays just above the range tops, while Fibo support keeps so far the downside protected.
Technical signals are mixed, as daily studies remain in bearish setup and keep in play risk of bearish continuation through 1.0786 pivot towards targets at 1.0700 (psychological) and 1.0635 (May 31 low).
On the other hand, initial bullish signal is developing on weekly chart (last week’s inverted hammer candle, 14-w momentum broke into positive territory and stochastic is oversold) which keeps alive expectations for stronger advance.
Break of 200DMA to expose 1.0875/86 (20DMA /Fibo 23.6% of 1.1275/1.0766 bear-leg), with extension above 1.0945/60 (Aug 30 recovery top / Fibo 38.2%) needed to signal reversal.
Otherwise, limited recovery (extended upticks to be capped under falling 20DMA) would offer better levels to re-enter larger downtrend.
Res: 1.0817; 1.0834; 1.0875; 1.0945.
Sup: 1.0766; 1.0700; 1.0667; 1.0635.
Interested in EUR/USD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.