EURUSD – weakening daily technicals increase downside risk

Slobodan Drvenica Windsor Brokers

EURUSD

The Euro fell near recent lows at 1.1130/40 zone after recovery attempts were repeatedly capped by 20SMA and hawkish comments from Fed policy maker William Dudley boosted the dollar.

Monday’s long red daily candle and 10/20SMA bear cross weigh on near-term action which puts last week’s low at 1.1132 and more significant 1.1121/09 supports (Fibo 38.2% of 1.0839/1.1295 upleg / 30 May low) under renewed pressure.

Fresh near-term bears were so far contained by bull-trendline, connecting 1.1109/1.1132 lows and rising daily Kijun-sen, however, negative near-term studies and daily technicals gaining bearish momentum, see risk of further weakness.

Firm break below 1.1121/09 pivots is required to signal bearish resumption and open next targets at 1.1067 and 1.1013 (Fibo 50% and 61.8% retracement of 1.0839/1.1295 upleg respectively).

Limited upside action is seen as focus is turning lower, with extended upticks expected to stay below widening hourly cloud (cloud base is currently at 1.1178).
Falling 10SMA is maintaining downside pressure.

Alternative scenario needs bullish acceleration and close above 20SMA / daily Tenkan-sen (1.1207/13 respectively) to neutralize rising downside risk.

Res: 1.1165; 1.1178; 1.1193; 1.1207
Sup: 1.1140; 1.1132; 1.1121; 1.1109

Interested in EURUSD technicals? Check out the key levels

1. R3 1.1226
2. R2 1.1218
3. R1 1.1211
PP 1.1203
1. S1 1.1197
2. S2 1.1189
3. S3 1.1182

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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