EUR/USD Outlook: Bulls face strong headwinds from thick falling daily cloud

Slobodan Drvenica Windsor Brokers

EUR/USD

The Euro holds within narrow-range directionless mode for the second day, following failure to close above falling 55DMA (1.1050) and weighed heavily by thick falling daily cloud.
Daily studies remain supportive, as bullish momentum continues to rise; MA's (10/20/30) are in bullish setup and daily Tenkan-sen/Kijun-sen lines made bullish cross, but bulls remain capped for now.
Near-term bullish bias is expected to stay intact while the price holds above strong 1.10/1.0990 support zone (30DMA/Fibo 38.2% of 1.0878/1.1062/10DMA), but penetration and close within daily cloud is needed to generate initial bullish signal for continuation of bull-leg from 1.0878 (1 Oct low).
Extension above 1.1082 (Fibo 38.2% of larger 1.1412/1.0878 fall) would provide further bullish signal and expose daily cloud top (1.1148, also 50% of 1.1412/1.0878). Caution if another Doji forms today, as this could signal bulls' stall.
Break and close below 1.1000/1.0990 would generate initial bearish signal.
German ZEW data in focus today and may increase pressure on negative release or stronger miss (Oct -27 f/c vs -22.5 prev).

Res: 1.1050; 1.1082; 1.1109; 1.1148
Sup: 1.1012; 1.1000; 1.0988; 1.0970

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

1. R3 1.1072
2. R2 1.1057
3. R1 1.1042
PP 1.1027
1. S1 1.1011
2. S2 1.0997
3. S3 1.0981

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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