EUR/USD outlook: bulls hold grip but continue to face strong headwinds at 100DMA/daily cloud top

Slobodan Drvenica Windsor Brokers

EUR/USD

EURUSD probed again through strong barriers at 1.1560/66 (100DMA/daily cloud top) on Monday, following Friday’s false break higher, but continues to face headwinds at this zone.

The single currency benefited from weak NFP data that further deflated dollar on Friday, pressured by fading expectations for Fed rate hike in September, but so far lacks strength for final break.

Near-term structure remains firm as bullishly aligned daily studies continue to underpin the action, with extended consolidation (1.1515/1.1560) likely to precede fresh push higher.

Markets await release of US July CPI data (Wednesday) to add fresh details in near-term policy outlook, with Euro expected to benefit from weaker inflation.

Sustained break of 100DMA/cloud top to generate fresh bullish signal for attack at nearby Fibo barrier at 1.1586 (50% retracement of 1.1849/1.1324) which guards next target at 1.1626 (200DMA).

Extended dips should be ideally contained above broken Fibo 38.2% resistance (1.1524) to keep bulls in play.

Caution on break of 1.1500 support zone (broken bull-channel upper boundary/round-figure) that would signal deeper pullback.

Res: 1.1566; 1.1586; 1.1626; 1.1649.
Sup: 1.1524; 1.1500; 1.1484; 1.1460.

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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