EUR/USD: Constructive outlook while above January lows of 1.1121 – DBS Bank
EUR/USD has moved to a 1.1495 high from a 1.1123 low. Although the pair remains restrained by 200-week moving average of 1.1493, it is building a constructive falling wedge pattern, as Benjamin Wong, Strategists at DBS Bank, notes.
Range dips to be supported
“Remember that 1.1493 houses a robust 200-week moving average marker. A breakthrough is thus needed to get a nudge past this; the next key resistance is at 1.1560, enroute to 200-day moving average (DMA) of 1.1658.”
“A neckline break has approximated its target landing when EUR/USD traded down to the January lows of 1.1121. On its standard deviation measure, EUR is also displaying a bullish divergence. The pair is as well shielded by the 76.4% Fibonacci retracement support of the 1.0636-1.2349 range grip at 1.1042. This explains why EUR is finding range dip support.”
“EUR’s decline from 1.2266 takes the mould of a falling wedge, which is deemed a bullish reversal but ultimately requires a dose of momentum and acceleration. Given the inability to surmount 1.1495, there is a minor double top to factor in. That should contour a dip into its 61.8% Fibonacci retracement of 1.1495-1.1121 at 1.1264 to get long.”
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FXStreet Insights Team
FXStreet
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