EUR/USD outlook: Tests strong support zone after a sharp drop

Slobodan Drvenica Windsor Brokers

EUR/USD

EURUSD lost ground on Monday after a gap-higher opening and short-lived gains, losing nearly 0.7% in late-Asian / early European trading.

Positive impact from US-EU trade deal was so far very limited, probably that markets have already positively reacted on anticipation that agreement will be reached before the deadline and after digesting the news about the whole package, signed in Scotland, which may not be in favor of the EU bloc.

Technical picture on daily chart weakened as 14-d momentum crossed in the negative territory, after bears cracked initial support at 1.1672 (daily Tenkan-sen) and eye more significant supports at 1.1650/30 zone (Fibo 23.6% of 1.1065/1.1830 uptrend / daily Kijun-sen / trendline support.

Violation of these levels would further weaken near-term structure and unmask key supports at 1.1556/37 (July 17 higher low / Fibo 38.2%), loss of which to complete bearish failure swing pattern and generate reversal signal.

Conversely, ability to hold above the trendline (ideally) would generate initial signal about a healthy correction before larger bulls return to play.

Res: 1.1703; 1.1770; 1.1789; 1.1830.
Sup: 1.1650; 1.1630; 1.1589; 1.1556.

Interested in EUR/USD technicals? Check out the key levels

1. R3 1.1829
2. R2 1.1796
3. R1 1.1769
PP 1.1736
1. S1 1.1709
2. S2 1.1676
3. S3 1.1649

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.