Richard Perry
Independent Analyst
Since the euro hit the reaction high at $1.1436 in June, there has been a series of lower highs and lower lows on the daily chart. However, as with many selling phases, there may just be the odd near term counter trend move. For the past five sessions, the euro has been in recovery mode which has seen a move from a low at $1.0808 on 20th July to now stand over 250 pips higher. So, this now leads to the question of whether there is anything more in this move than a rally that will be sold into. I have for a while suggested that anytime the euro is below the medium term pivot at $1.1050 it is a bearish outlook and whilst above it, the outlook is more positive. This time though, I feel there needs to be more flexibility. The falling 144 day moving average has been an excellent basis of resistance in recent weeks (at $1.1115), whilst the previous reaction lower high at $1.1215 is also intact as resistance. The RSI is now up into the low 50s, whilst the MACD lines are also still negatively configures. The only factor that is positive now is the Stochastics which are rising. This suggests that a lot more needs to be done to suggest the bulls are controlling. I feel that another lower high is not far off now. Initial resistance is at $1.1128 with the intraday hourly chart showing support at $1.1056 and $1.1018.
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