Richard Perry
Independent Analyst
EUR/USD
After the dollar went on a surge of strength earlier this week, the move has just begun to consolidate slightly in the past 24 hours. Picking up from 1.1625 yesterday, a mild positive candle formation on the daily chart has just tempered the negative pressure on EUR/USD. The outlook recently turned decisively corrective with closing breaches of the support band 1.1695/1.1750. This band now becomes resistance of overhead supply for a rebound. How the market reacts to this 1.1695/1.1750 resistance is key for the outlook. There is room for a little pullback rally near term, with the downtrend of the past three weeks sitting around 1.1825 today. We look towards momentum indicators to signal how far a rally could go and the next likely selling area. The daily RSI into the 30s could rebound towards 50 whilst Stochastics could also rebound into the 30/40 area. A bull failure between 1.1695/1.1750 would be a near term opportunity to sell for the top target of around 1.14/1.15. Initial support at 1.1625 now protect the downside move towards next supports at 1.1420/1.1490.
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