EUR/USD outlook: Correction was so far limited but risk of deeper pullback still exists
EUR/USD
EURUSD edges higher in European trading on Monday as bears are taking a breather after a two-day pullback from a multi-week high (1.0948).
Rising 10DMA and Fibo 23.6% of 1.0666/1.0948 (1.0881) contained dips for now, signaling a scenario of shallow correction before larger bulls regain control.
Talks about possible start of easing monetary policy as early as September add to positive outlook for the single currency, as daily studies keep strong positive momentum and MA’s remain in bullish setup.
However, weekly bull trap above 1.0933 Fibo barrier and weekly Doji candle with long upper shadow, warn that bulls might be running out of steam and deeper pullback cannot be ruled out.
Sustained break of 10 DMA / Fibo support to activate such scenario and expose next supports at 1.0840/07 (Fibo 38.2% / 50% / 200DMA).
Conversely, ability to hold above 1.0881support would keep near-term bias with bulls, with extension and close above 1.09 zone to generate initial signal of reversal and formation of a higher low.
Res: 1.0902; 1.0922; 1.0948; 1.0964.
Sup: 1.0881; 1.0840; 1.0807; 1.0788.
Interested in EUR/USD technicals? Check out the key levels
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.
