EUR/USD: Bears to remain in control from $1.0700?

Aaron Hill FP Markets

Europe’s shared currency wrapped up the week off best levels, eking out a marginal gain of +0.3% versus the US dollar.

Higher timeframes suggest further underperformance

Things are not looking too cheerful for the euro, both from a technical and fundamental perspective. Scope to continue pressing southbound on the monthly scale until support at $1.0516 is evident, together with daily price movement fading resistance at $1.0739 (in the shape of a daily outside reversal candle) on Friday with room to approach year-to-date lows of $1.0601.

Adding to the bearish vibe, both monthly and daily timeframes are trending south. The daily chart also recently printed a Death Cross (the 50-day SMA crossing under the 200-day SMA), communicating the potential for a longer-term downtrend.

Short-term price action to hold resistance

Shorter-term flow on the H1 timeframe concluded Friday testing resistance at $1.07 after challenging the lower limits of a neighbouring support and resistance zone at $1.0680-$1.0690. South of here, attention is on supports from $1.0632, $1.0648 and $1.0664.

Given the higher timeframe direction, which is eyeing lower prices at the moment, short-term traders are likely watching to sell rallies from resistance. This will be particularly true if euro area inflation comes in softer than expected this week. Thus, the $1.07 region stands out as potential resistance to be aware of. Should sellers continue to defend the big figure in early trading and price clears remaining bids from $1.0680-$1.0690, the above-noted support levels on the H1 scale could be targeted.

Author

Aaron Hill

FP Markets

After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,

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