EUR/USD: How sustainable is the prospect of recovery? [Video]

EUR/USD

There has been a pause in the run of decisively negative candles this morning, as the euro has come into the new trading week with a degree of support. The question is, how sustainable is the prospect of recovery? There needs to be a move that breaks the run of lower highs, and for that, it needs a breach of $1.0865. Momentum maintains a negative bias on the daily chart, but there is a suggestion on the hourly chart that the bulls are testing the water. Hourly momentum is more positive this morning, but needs the RSI above 60 and MACD lines rising above neutral to suggest there is any real intent in this move today. There is an old pivot at $1.0830 which is being tested, but Friday’s reaction high at $1.0865 is important, whilst a move back above $1.0900 to confirm the bulls are fighting back. For now, in the absence of any sustainable recovery signals, this early bounce today is still most likely to be taken as a bear rally and another chance to sell. Support initially around $1.0800 this morning, with $1.0770 from Friday’s low being breached would simply re-open $1.0635 again. We favour selling into strength still at this stage.