EUR/USD analysis: poised to break lower, Tuesday PMIs will decide
EUR/USD Current price: 1.0610
The dollar received a vote of confidence late last week, advancing against most of its major rivals with the clear exception of the JPY, as data released during these last few days indicated a rebound in inflation and economic activity, whilst FED's head Yellen hawkish testimony before the Congress, boosted chances of a rate hike in March. The common currency, on the other hand, remained undermined by political woes, as adding to the upcoming elections were rising concerns about Greece, still struggling to meet austerity requirements to get bailouts. This upcoming week will start with a banking holiday in the US, anticipating some choppy trading across the board, although next Tuesday, the release of February preliminary PMIs figures in both economies could set the tone for the whole week.
The EUR/USD pair closed on Friday at 1.0610, pretty much flat when compared to its previous weekly close, and is technically poised to extend its decline during the upcoming days, given that in the daily chart, advances were contained by a bearish 100 DMA, around 1.0680, whilst the Momentum indicator maintains a strong bearish slope within negative territory, and the RSI indicator resumed its decline after a tepid upward correction, also developing within bearish levels. In the 4 hours chart, the price settled a few pips below a flat 20 SMA, while the RSI indicator turned flat around 44 and the Momentum indicator retreats from overbought readings, still above its 100 level. The key for the upcoming days is the Fibonacci support at 1.0565, as renewed selling interest below the level will open doors for an extension sub-1.0500.
Support levels: 1.0590 1.0565 1.0520
Resistance levels: 1.0650 1.0680 1.0720
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
