EUR/USD outlook: Thick daily ichimoku cloud continues to limit recovery

Slobodan Drvenica Windsor Brokers

EUR/USD

Although the Euro stands at the front foot and continues to attempt higher, the recovery remains questioned, as thick daily cloud continues to limit the action for the sixth straight day, while falling 55 DMA (1.0614) additionally weighs.

Technical studies on a daily chart show still strong bearish momentum and mixed setup of moving averages (5,10,20,55), while daily cloud, spanned between 1.0596 and 1.0767, continues to strongly pressure the action that adds to stall signals.

Expect initial negative signal on return and close below 10DMA (1.0533), with drop below1.0469/56 (June 22 spike low/Fibo 61.8% of 1.0358/1.0614) to confirm lower top and shift focus towards key supports at 1.0358/49/40 (lows of June 15/May 13/2017).

Only sustained break above 55DMA would strengthen near-term structure and generate initial signal of bullish continuation of recovery leg from 1.0358.

Res: 1.0614; 1.0623; 1.0685; 1.0700.
Sup: 1.0577; 1.0533; 1.0517; 1.0486.

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

1. R3 1.0681
2. R2 1.0648
3. R1 1.0617
PP 1.0584
1. S1 1.0552
2. S2 1.0519
3. S3 1.0488

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 breaks below 1.1800, two-week lows

EUR/USD’s selling pressure is gathering pace now, breaching below the key 1.1800 yardstick to hit new two-week troughs on Wednesday. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and ahead of the publication of the FOMC Minutes.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.