Richard Perry
Independent Analyst
EUR/USD
A strong rebound in yesterday’s session leaves the market testing a crucial resistance around 1.1750. We have discussed the importance of 1.1695/1.1750 resistance as the band of old support has become overhead supply. Yesterday’s rally is testing this band, but as the market rolls over slightly this morning, it is still intact as a basis of resistance. The corrective outlook across momentum indicators remains in place on a medium term basis and having broken so decisively below 1.1695 last week, we look to use near term rebounds as a chance to sell. This still looks to be an opportunity to sell rather than the start of a big EUR recovery. A four week downtrend falls around 1.1795 today, whilst RSI is into the mid-40s. If the market begins to form negative candles once more on the daily chart, we would be looking to sell for a retest of 1.1610. Moving decisively above 1.1750 would hamper the corrective outlook, but the selling pressure of lower highs and lower lows remains viable whilst under the four week downtrend.
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