EUR/USD Price Analysis: Bulls looking to a significant correction from daily support
|- EUR/USD meets daily support, bulls looking for a correction to at least a 38.2% Fibo.
- US dollar extending the upside correction from monthly support.
EUR/USD extended the downside at the start of this week as the US dollar continues to recover from the near 3-year low hit last week as US yields climb.
The DXY is in its fourth straight session of gains, trading some 0.36% at the time of writing with price embedded in monthly demand territory:
Meanwhile, the euro is potentially overextended to daily support territory and a correction could be in order before a further decline.
The following offers technical analysis on the daily chart:
The topping formation following the bearish engulfing candlestick has been confirmed with the latest break below the 10-day moving average and dynamic trendline support.
The daily support could lead to a correction back to test the 10-DMA in at least a 38.2% Fibonacci retracement.
If a correction does indeed come as a consequence of the demand area, then a re-run to the downside would leave a topping pattern in the head and shoulders as follows:
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.