EUR/USD outlook: Near-term studies remain bearishly aligned

Slobodan Drvenica Windsor Brokers

EUR/USD

The Euro trades in a slower mode on Tuesday after previous day’s bounce temporarily sidelined larger bears (off 1.1808 peak).

Mixed signals from daily candlestick (bullish engulfing / strong upside rejection left bullish daily candle with long upper shadow) contribute to overall technical picture.

Momentum studies remain bearishly aligned and daily Tenkan/Kijun-sen formed bear-cross, along with still magnetic daily cloud twist, signal that near-term risk is still shifted to the downside.

Retest of cracked 50% retracement of 1.1468/1.1808 ascend (1.1638) and potential extension towards the top of thinning daily cloud (1.1623) might be likely near-term scenario, as long as the action is fueled by Monday’s bull-trap (above broken Fibo 38.2% at 1.1679) which also capped today’s action.

Although the dollar was hurt by fresh rally into safety that favored precious metals, today’s release of US economic data showed that inflation was practically unchanged and increased slightly less than expected in December, adding to expectations that the Fed would leave rates unchanged this month and keep the greenback underpinned.

Res: 1.1698; 1.1730; 1.1765; 1.1780.
Sup: 1.1650; 1.1638; 1.1618; 1.1598.

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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