EURUSD: Prefer to buy dips

Jim Langlands FX Charts

EUR/USD: 1.0738

The Euro spent a relatively quiet Friday session confined to a range of 1.0727/82, capped on the topside after a poll indicated that Marine Le Pen is making gains in the French election, while supported on the downside by the soft tone to the dollar.

The short term momentum indicators suggest that we may be in for a similar session on Monday, with the 4 hour charts being overbought and turning to point lower, while the dailies are beginning to look a little more constructive. The contradictory look of the indicators suggest that EurUsd will remain choppy and rangebound on Monday and possibly Tuesday. If wrong, and the Euro can make further headway, then above Friday’s high would find sellers at the descending trend resistance, now at around 1.0790 and which should be strong at the first attempt. Beyond there though, could then head towards 1.0830, a break of which we could then see a run towards 1.0873 (8 August high) and on to the 200 DMA (1.0900). On the downside, support will be seen at the minor Fibo levels from the move up from the recent 1.0490 low, beginning at 1.0715 and then at 1.0670. As before, given the increasingly positive look of the daily charts, it would appear that buying dips is the current plan although I remain wary of buying the Euro towards the top end of the recent range, and if Le Pen makes further advances in the French polls the Euro will find it has limited topside potential.

24 Hour: Prefer to buy dips		Medium Term: Neutral
Resistance		Support
1.0900	200 DMA	1.0727	Friday low
1.0873	5 Aug high	1.0714	(23.6% of 1.0494/1.0782)
1.0829	2 Feb	1.0670	(38.2% of 1.0494/1.0782)
1.0790	Descending trend resistance	1.0635	(50% of 1.0494/1.0782)
1.0782	Friday high	1.0605	(61.8% of 1.0494/1.0782)

Economic data highlights will include:

M: German PPI, BuBa Monthly Report, US Chicago Fed National Activity Index, Fed’s Evans Speech

T: US Current Account, Fed’s George Speech, API Weekly Crude Oil Stock Inventory

W: ECB Non-MP Meeting, Current Account, US House Price Index, Existing Home Sales, EIA Crude Oil Stocks Weekly Change

T: German Consumer Confidence, EU Economic Bulletin, Targeted LTRO, Janet Yellen Speech, US Jobless Claims, Kansas Fed Mfg Activity, New Home Sales, Fed’s Kashkari Speech EU Provisional Consumer Confidence

F: EU/US Flash Mfg/Composite/Services PMIs, US Durable Goods Orders, Fed’s Evans/Bullard Speeches

Interested in EURUSD technicals? Check out the key levels

1. R3 1.0762
2. R2 1.0754
3. R1 1.0749
PP 1.0741
1. S1 1.0736
2. S2 1.0728
3. S3 1.0723

Author

Jim Langlands

FX Charts

Jim Langlands began his trading career in the commodities markets in London in 1976, before moving to Australia in 1979 to work as a floor trader on the Sydney Futures Exchange.

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