EUR/USD Price Analysis: Path of least resistance appears down ahead of Lagarde
|- EUR/USD wavers in a tight range below 1.1700-1.1730, Lagarde eyed.
- German election wrangling and weaker US dollar leave the pair in limbo.
- EUR/USD’s hourly chart shows that downside remains more compelling for now.
EUR/USD is attempting a tepid bounce from daily lows, but remains well within the trading range so far this Monday, as markets refrain from placing any fresh bets on the main currency pair after the German election outcome and ahead of the speech by the European Central Bank (ECB) Christine Lagarde.
Markets also await the US Durable Goods Orders data for fresh dollar trades, as the risk-on mood appears to keep the USD bulls at bay in early Europe. Receding China Evergrande fears combined with the US infrastructure stimulus optimism has lifted the investors’ sentiments starting out a big week, with Fed Chair Powell’s testimony and the US ISM Manufacturing Index – the key highlights.
Looking at EUR/USD’s one-hour chart, the price is teasing an ascending triangle breakdown, with an hourly candlestick closing below the rising trendline support at 1.1722 to validate the downside breakout.
A test of the 1.1700 mark will be inevitable on a triangle breakdown, opening floors for a retest of the multi-week lows near 1.1680.
The Relative Strength Index (RSI) is pointing south below the midline, backing the case for further downside.
EUR/USD: Hourly chart
Alternatively, recapturing of the triangle support now resistance at 1.1722 is critical to attempting a minor pullback towards the horizontal 100-Hourly Moving Average (HMA) at 1.1726.
Further up, the mildly bullish 50-HMA at 1.1730 could be challenged by the bullish traders. The 1.1750 psychological level will come into play if the buying pressure intensifies.
EUR/USD: Additional levels to consider
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