EUR/USD outlook: Recovery needs further positive signals to resume
EUR/USD
The Euro regained traction and bounced 0.3%, after pullback from 1.0895 (May 16 high) was repeatedly rejected at 100DMA (1.0814), generating initial signal of a double-bottom and potential end of corrective phase.
Fresh strength so far retraced over 50% of 1.0895/1.0812 pullback and on track complete bullish engulfing pattern on daily chart, which would reinforce reversal signal.
Daily MA’s returned to bullish setup, with 10/200DMA golden cross and converged 20/200DMA’s about to form another cross, while positive momentum remains strong and adds to improved technical picture.
Better than expected May PMI data from Germany and Eurozone, released earlier today, positively impacted the single currency by adding to bets for ECB’s June rate cut, however, upbeat US PMI data partially offset the positive impact.
Daily close above broken 50% retracement level (1.0853) will be a minimum requirement to keep fresh bulls intact for further recovery and possible attack at key near-term barriers at 1.0891/95 (Fibo 76.4% / May 16 peak.
On the other hand, dip and close below rising 10DMA (1.0838) would weaken near-term structure and risk renewed attack at key 100DMA support, loss of which would shift near-term focus to the downside.
Res: 1.0838; 1.0885; 1.0891; 1.0942.
Sup: 1.0838; 1.0814; 1.0786; 1.0760.
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.
