EURUSD – limited correction to precede fresh upside
|The Euro is taking a breather on Thursday and eases from fresh six-month high at 1.1171, posted after strong four-day rally.
The move could be described as corrective on overextended daily studies and reduced pressure on US dollar amid the latest political turmoil in the US. Also, investors are looking to take profits on recent strong rally that may push the pair lower.
In absence of data from the Eurozone today, the pair is expected to be driven by technicals and development of the political situation in the US.
Reversal signal is developing on 4-hr chart as strongly overbought RSI and slow stochastic are turning lower.
Also, slow stochastic is overbought on daily chart and is expected to generate bearish signal.
However, Euro’s strong bullish sentiment suggests that correction should be limited.
Broken Fibo 61.8% of larger 1.1614/1.0338 descend at 1.1127 is so far acting as initial support and is holding today’s action.
Extended pullback should be ideally contained by broken weekly cloud top at 1.1065, however, deeper dips may extend towards former high at 1.1020 (08 May) and psychological 1.1000 support (reinforced by rising daily Tenkan-sen) which mark lower pivots, loss of which would trigger stronger correction and sideline immediate bulls.
Res: 1.1171; 1.1201; 1.1250; 1.1300
Sup: 1.1127; 1.1078; 1.1065; 1.1020
Interested in EURUSD technicals? Check out the key levels
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