EUR/USD outlook: Bulls continue to face headwinds at 200DMA as signals are mixed

Slobodan Drvenica Windsor Brokers

EUR/USD

Fresh advance in early European trading on Thursday probes again through cracked 200DMA barrier, offsetting, for now, negative signals from Wednesday’s strong upside rejection that left bearish daily candle with long upper shadow and repeated failure to close above 200DMA.

The picture on daily chart is slightly bullish but signals are still mixed, with Fed’s cautious approach to its policy and signals that no changes in the policy or reducing current bond purchases could be expected anytime soon, deflating dollar and giving a fresh boost to the single currency.

On the other side, concerns about Astra Zeneca’s vaccine continue to weigh and keep the action limited for now.

Daily studies show rising momentum but overbought stochastic while headwinds from 200DMA persist as falling 30DMA is on course to form bear cross with 200DMA and reinforce resistance.

Near-term action is expected to keep slight bullish bias above 20DMA (1.1846), but caution on potential third failure to close above 200DM that would increase risk of pullback.

Res: 1.1914; 1.1946; 1.1990; 1.2000.
Sup: 1.1860; 1.1846; 1.1812; 1.1798.

Interested in EUR/USD technicals? Check out the key levels

1. R3 1.1955
2. R2 1.1935
3. R1 1.1901
PP 1.1881
1. S1 1.1847
2. S2 1.1827
3. S3 1.1793

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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