EUR/USD outlook: Euro may fall further after consolidation
EUR/USD
The Euro bounces from new 20-year low (0.9548) hit overnight, in extension of Friday’s almost 1.5% drop. Bears faced a headwinds after break of initial target at 0.9601 (Sep 2002 low), with profit-taking on oversold conditions, seen rather as a positioning for fresh push lower, as technical picture is bearish and worsening fundamentals add to negative outlook.
Traders got stuck after reversing from short to long positions on ECB’s 0.75% rate, as Fed hiked for the third consecutive time by 75 basis points and signaled it will remain on aggressive track that continued to inflate dollar.
In addition, downbeat German Ifo data confirm that the Eurozone economy remains fragile, while single currency could be also. dragged by weakening pound on UK fiscal drama.
Recovery was so far capped by Fibo 23.6% of 1.0197/0.9548 bear-leg (0.9701), with firm break here needed to ease downside pressure and allow for extension towards key barrier at 0.9796 (Fibo 38.2% / falling daily Tenkan-sen).
Otherwise, bears will remain fully in play while the action stays below 0.9701 and risk retest of 0.9547 low, loss of which would open way for test of psychological 0.90 support.
Res: 0.9701; 0.9740; 0.9796; .9812.
Sup: 0.9620; 0.9601; 0.9548; 0.9500.
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.
