EUR/USD: the euro remains on the brink of a key inflection point as the January ECB meeting approaches [Video]
|EUR/USD
The euro remains on the brink of a key inflection point as the January ECB meeting approaches. The bulls will have been chastened as a dip below $1.1100 has come and EUR/USD is now testing the support of a key three and a half month uptrend. The trend is supportive today at $1.1075 which is above the support of the first key higher low at $1.1065. This higher low at $1.1065 is crucial as if broken on a closing basis, it would suggest a new bear trend formation is taking prominence. For now, momentum indicators are holding up, but there is a sense of deterioration setting in through the Stochastics (falling below 20) and the MACD lines which are dropping back to neutral. Whilst the RSI remains above 40 there is still a broadly positive medium term outlook. Given how the market sold off decisively into the close yesterday, it is clear that the bears are in the ascendency as rallies are a chance to sell. The old $1.1100 pivot is a basis of resistance under $1.1120 of yesterday’s high.
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