EUR/USD: Negative outlook on momentum is abating slightly [Video]

Richard Perry Independent Analyst

EUR/USD

With the sell-off and struggles of the euro in the past week, the pressure to the downside on EUR/USD has continued. But an intraday rally this morning is now threatening a near term improvement and EUR/USD could be at an interesting crossroads. It was interesting to see that whilst many other majors rallied against the dollar yesterday, the euro continued to struggle. However, overnight, a pick up of around 50 pips is testing resistance around $1.0830 once more. This is also around the 23.6% Fibonacci retracement (of $1.1492/$1.0635) at $1.0835. The negative outlook on momentum is abating slightly but needs more to suggest a turnaround is decisive. However, it is the hourly chart where the move this morning is really threatening. An intraday move to a two day high, whilst breaking a six day downtrend has been seen. Also, the hourly RSI is above 60, something not seen during the latest sell-off; whilst the hourly Stochastics and MACD are also increasingly in recovery mode. The 55 hour moving average has been a great gauge for the outlook in the last two weeks and in the past few hours the euro rebound is above it and trying to lead it higher. A break above $1.0865 would add credence to a recovery, but also sustaining consistently above $1.0830 too. A break above $1.0865 opens $1.0900/$1.0950. The support at $1.0765/$1.0780 is growing in importance as protection against a full retracement to $1.0635.

Author

Richard Perry

Independent Analyst

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