EUR/USD outlook: EURUSD falls to one-year low

Slobodan Drvenica Windsor Brokers

The Euro extends steep fall into fifth consecutive day and falls to the lowest in one year on Tuesday, following break of former 2026 low (1.1410).

The single currency was deflated by growing expectations of Fed rate hike that continue to boost US dollar, with latest dovish remarks from ECB President Lagarde, adding pressure.

Fresh weakness nears next technical support at 1.1354 (Fibo 38.2% of 1.0177/1.2082 rally) and is about to complete Head and Shoulders pattern on weekly chart that would reinforce bearish stance.

Full bearish setup of daily studies supports negative scenario, but oversold conditions warn of increased headwinds bears may face on approach 1.1354 Fibo level and 100WMA (1.1290).

Daily close below 1.1410 is needed to validate signal, however, bounce on partial profit taking may precede.

Under current conditions, upticks are likely to be limited and ideally to be capped by 1.1500 resistance zone (psychological / falling 10DMA / former daily higher base) to provide better levels for re-entering bearish market.

Firm break of 1.1354/1.1290 pivots to open way for extension towards 1.1130 (50% retracement) and to unmask weekly cloud base (1.1048) and 1.1000 zone (psychological / 200WMA).

Res: 1.1410; 1.1443; 1.1500; 1.1555

Sup: 1.1354; 1.1290; 1.1210; 1.1130

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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