EUR/USD outlook: Mixed signals while the price holds within daily cloud

Slobodan Drvenica Windsor Brokers

The Euro remains in red on Monday, although with limited downside so far, after Friday’s strong upside rejection left bearish daily candle with long upper shadow and formed a bull-trap at daily cloud top, generating initial negative signal.

Technical picture on daily chart shows MA’s in mixed setup, negative momentum and the price moving within daily cloud (spanned between 1.1600 and 1.1685) and holding above broken daily Tenkan-sen (1.1635) for the third consecutive day, lacking direction signal for now.

Traders look for fresh catalysts, such as strong recovery of gold after pullback and revived risk aversion, with focus also on release of US inflation report on Friday (if government reopens) that may generate fresh signals.

Initial negative signals are expected on break of Tenkan-sen, while sustained break below daily cloud will be bearish.

Conversely close above daily cloud top to revive bulls and lift above 1.1730 (daily Kijun-sen / 50% of 1.1918/1.1542 descend) to confirm.

Res: 1.1685; 1.1700; 1.1730; 1.1774.

Sup: 1.1635; 1.1600; 1.1555; 1.1542.

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

1. R3 1.3475
2. R2 1.3459
3. R1 1.3432
PP 1.3416
1. S1 1.3389
2. S2 1.3373
3. S3 1.3346

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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