In view of Tim Riddell, Research Analyst at Westpac, triple divergence in daily momentum flags the risk of corrections for EUR/USD pair, should range resistance cap the extended gains off 1.0570 (close below 1.14 risks 1.1150).
“If dips can be avoided, retests of 2016’s highs (1.1615-1.1715) could be seen but within the context of defining a higher, but consolidative, trading range”
- Weekly momentum avoided rolling-over but remains at extremes. This bodes caution as range resistance is tested
- Weekly closes above 1.13 have reduced deep retracement risks, but stretched momentum and extended price action both highlight potential for corrections”
- A strong upswing in monthly momentum is accompanying the test of horizontal resistance. This raises the potential that a base may have formed
- Although a long term base may have formed, a prolonged period of effective range trading is still likely before a more directional/dynamic move can develop”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.