EUR/USD Price Analysis: Lagging indicator traps bulls on the wrong side


  • EUR/USD drops despite a bull cross of major moving averages/
  • Momentum indicators signal deeper losses could be in the offing.

EUR/USD fell nearly 1%, as widening US-German yield differential and the resurgence of coronavirus cases across the Eurozone weighed over the common currency.

The weekly drop contradicted the bullish crossover of the 50- and 100-week simple moving averages. That's hardly surprising, as longer duration SMA crossovers are based on backward-looking data and lag prices. More often than not, crossovers trap traders on the wrong side of the market. 

The pair looks set to extend last week's decline with the daily chart reporting a failed bearish channel breakout, a bearish signal, and the weekly chart MACD histogram printing a deeper bar below zero, a sign of the strengthening of downward momentum. 

Support is seen at 1.1688 (Thursday's low) and 1.1608 (100-day SMA), while resistance is located at 1.1752 (10-day SMA) and 1.18 (psychological hurdle). 

Weekly chart

Trend: Bearish

Technical levels

EUR/USD

Overview
Today last price 1.1719
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.1719
 
Trends
Daily SMA20 1.1732
Daily SMA50 1.1794
Daily SMA100 1.1604
Daily SMA200 1.1281
 
Levels
Previous Daily High 1.1746
Previous Daily Low 1.1694
Previous Weekly High 1.1827
Previous Weekly Low 1.1688
Previous Monthly High 1.2011
Previous Monthly Low 1.1612
Daily Fibonacci 38.2% 1.1726
Daily Fibonacci 61.8% 1.1714
Daily Pivot Point S1 1.1693
Daily Pivot Point S2 1.1668
Daily Pivot Point S3 1.1641
Daily Pivot Point R1 1.1745
Daily Pivot Point R2 1.1772
Daily Pivot Point R3 1.1798

 

 

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