The EUR/USD made a pause this week, extending the year low down to 1.2859 yet unable to regain the 1.2950 level, tested uncountable times over these last 5 days. Extremely oversold according to the daily chart, indicators show some shallow bounces, with price recovery even shyer, which reflects selling interest still dominates the pair. Next week, the destiny of the pair will be highly linked to FED’s economic policy meeting, with market players eagerly waiting for some change in the Central Bank wording to add dollars to their portfolio. Failure to the deliver may help the pair correct higher, eyeing the 23.6% retracement of this year fall then at 1.3120 as a probable bullish target for next week.
In the same daily chart, 20 SMA converges with the mentioned Fibonacci level, reinforcing the strength of the resistance, and turning it into a critical breakout point for current bearish trend, as if price manages to reach it yet retraces, risk will remain to the downside, with fresh lows anticipating a test of the critical support area at 1.2740, where the pair presents multiple highs and lows in bigger time frames.
A steady recovery above 1.3120 on the other hand may see a stronger upward corrective movement, pointing then to a test of the 1.3300 area, 38.2% retracement of the same bearish rally. But from a fundamental side, there is little support for such a strong recovery; dollar strength is quite undeniable considering the greenback stands at multi-months highs against JPY, AUD and CAD.
Anyway, if fundamentals align with the dominant bearish trend, the EUR/USD will remain condemned despite extreme technical readings, with a weekly close below mentioned 1.2740 level exposing the pair to a test of 1.25 price zone.
View Live Chart for EUR/USD
In the same daily chart, 20 SMA converges with the mentioned Fibonacci level, reinforcing the strength of the resistance, and turning it into a critical breakout point for current bearish trend, as if price manages to reach it yet retraces, risk will remain to the downside, with fresh lows anticipating a test of the critical support area at 1.2740, where the pair presents multiple highs and lows in bigger time frames.
A steady recovery above 1.3120 on the other hand may see a stronger upward corrective movement, pointing then to a test of the 1.3300 area, 38.2% retracement of the same bearish rally. But from a fundamental side, there is little support for such a strong recovery; dollar strength is quite undeniable considering the greenback stands at multi-months highs against JPY, AUD and CAD.
Anyway, if fundamentals align with the dominant bearish trend, the EUR/USD will remain condemned despite extreme technical readings, with a weekly close below mentioned 1.2740 level exposing the pair to a test of 1.25 price zone.
View Live Chart for EUR/USD
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