EUR/USD outlook: Recovery lacks strength to clear pivotal barriers
|EUR/USD
The Euro holds for the second day in a corrective mode off new nearly 15-month low at 1.1524, where weekly cloud base contained larger downtrend, helped by weaker dollar.
Wednesday’s long bullish candle (the pair was up 0.53% for the day) formed bullish outside day, which is expected to underpin the action, but recovery showed signs of stall on approach to falling 20DMA (1.1631).
Quick return below broken pivotal Fibo barrier at 1.1612 (38.2% of 1.1755/1.1524 bear-leg) softens near-term tone as close above here and 20DMA is required to signal reversal and open way for further advance.
Failure to clear these barriers would question fresh bulls and keep the downside vulnerable.
Daily studies are in mixed setup as momentum is rising but the indicator remains deeply in the negative territory, 5/10DMA’s are about to for bull-cross, while slower MA’s (20/30/55 DMA) remain above the price and head south.
Near-term action is expected to remain constructive above 10DMA (1.1575), but without much of upside potential while 1.1612/31 barriers resist.
Caution on return below 10DMA that would risk retest of key weekly cloud base (1.1557).
Res: 1.1612; 1.1640; 1.1667; 1.1695.
Sup: 1.1557; 1.1524; 1.1492; 1.1421.
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