EURUSD: Prefer to sell rallies

Jim Langlands FX Charts

EURUSD: 1.0595

While the dailies remain negative, the short term momentum indicators are turning to point a little higher today, with the 4 hour charts showing a degree of bullish divergence, so some caution is warranted on the downside. If so, on the topside, above the session high of 1.0606, minor resistance lies at 1.0630 and comes ahead of minor Fibo resistance at around 1.0650. Beyond here, we could see another squeeze back the 7 Apr high of 1.0666, to the 5/6 Mar high of 1.0683/88 and to the 31 Mar high of 1.0701. The daily momentum indicators still look negative, suggesting further losses ahead at some stage. The session low of 1.0570 will provide the initial support, but below there could then see a run towards the Fibo level at 1.0555 and then towards 1.0525 and to the March double-bottom lows seen at 1.0494.

As before, selling rallies is preferred, with a SL placed above 1.0685 but looking for a run towards 1.0500 and eventually lower. Given the lack of any major data today, it could be rangebound, unless politics intervenes. Note that the daily cloud top/bottom is at 1.0615/1.0585, which may cover it again today although for the next few hours a minor topside squeeze would not surprise. The ZEW and EU Industrial Production will be minor risk factors today.

24 Hour: Prefer to sell rallies		Medium Term: Mildly bearish
Resistance		Support
1.0701/1.0695	31 Mar high/ (38.2% of 1.0906/1.0570)	1.0570	Session low
1.0683/88	6 Mar high/5 Apr high	1.0555	(61.8% of 1.0340/1.0906)
1.0666	(7 Apr high)/200 HMA	1.0525	9 Mar low
1.0648	(23.6% of 1.0906/1.0570 )	1.0500	Minor
1.0630	Minor	1.0494	22 Feb/2 Mar low

Economic data highlights will include:

German/EU ZEW Economic Sentiment Survey, EU Industrial Production, US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory

Interested in EURUSD technicals? Check out the key levels

1. R3 1.0611
2. R2 1.0602
3. R1 1.0592
PP 1.0582
1. S1 1.0572
2. S2 1.0563
3. S3 1.0553

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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