EUR/USD Outlook: close below key Fibo support/cloud top opens way for further weakness

Slobodan Drvenica Windsor Brokers

EUR/USD

Thursday's eventual break of pivotal support at 1.1064 (daily cloud top/Fibo 38.2% of 1.0878/1.1179) where bears paused for two days, was strong bearish signal. The pair hit new three-week low at 1.1035 in Thursday's bearish acceleration, which cracked 55DMA (1.1041) and pressuring 1.1029 Fibo support (50% of 1.0878/1.1179). Weekly chart shows strong bearish signals on formation of bearish engulfing, stochastics' reversal from overbought zone and momentum breaking into negative territory. However, extended consolidation may precede fresh weakness as daily stochastic is oversold and bearish momentum fading. Broken 1.1064 pivot now reverted to strong resistance and should ideally cap upticks, before fresh attempts lower. Break of 55DMA and 1.1029 Fibo support would expose next key levels at 1.1000/1.0993 (psychological/Fibo 61.8% of 1.0878/1.1179). Better than expected German trade data released this morning (Sep exports 1.5% vs 0.4% f/c; imports 1.3% vs 0.0% f/c and trade surplus 19.2B vs 18.1B f/c) made minor positive impact on euro.

Res: 1.1055; 1.1064; 1.1092; 1.1102
Sup: 1.1041; 1.1029; 1.1000; 1.0993

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

1. R3 1.1136
2. R2 1.1114
3. R1 1.108
PP 1.1058
1. S1 1.1024
2. S2 1.1002
3. S3 1.0968

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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