EUR/USD Forecast: bearish on a break below 1.0735
The dollar changed course against its major rivals this Tuesday, with the sharp u-turn being initially triggered by the announcement that the Scottish Parliament voted in favor of a second referendum, and then fueled by Wall Street's recovery, as the DJIA posted a three-digit advance following an eight days in-a-row decline. The EUR/USD pair fell to 1.0777 so far this Wednesday, trading below the 1.0800 threshold in the London session, despite the release of positive local data, as Import prices in Germany rose above expected during February, while Italian confidence surged in March above expected. Later today, the US will release its Pending Home sales for February, while several Fed's speakers will hit the wires.
As for the technical perspective, the short term picture shows that the price has broken below the key 1.0820/30 region, where the pair has the 50% retracement of the post-US election´s decline, and multiple intraday highs and lows. In the 4 hours chart, the pair also has the 20 SMA in the mentioned region, whilst technical indicator head lower within negative territory.
There's an immediate support at 1.0760, with a stronger one around 1.0735. It would take a break below this last to talk about a bearish extension towards 1.0690. A recovery beyond 1.0830 is required to see the pair recovering its bullish strength, and recover up to the 1.0870 first, en route to 1.0910.
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.
