EUR/USD Technical Analysis
On the daily chart below, we can see that after breaking down the 1.07 level, the sellers started to target the 1.05 handle. The whole move up from 1.02 to 1.10 diverged with the MACD, which is a signal of a loss of momentum. When the price breaks the trendline, it often comes all the way back to where the divergence started, which in this instance would be the 1.02 handle. Before coming to that, the sellers will need to break the strong 1.05 support. The fundamentals have turned in favour of the USD in February as many key economic reports started to come in better than expected and prompt the market to price in a higher terminal rate and no rate cuts this year. On the 4 hour chart below, we can see that from 1.08 the price started to diverge with the MACD and in fact we got a slow move downward with many pullbacks. This may be a sign that the market is not convinced yet by the February data and wants to see more to confirm the new trend. The price yesterday rallied into the downward trendline and found resistance. This is the first spot where the sellers should start to pile in targeting the 1.05 level. If the buyers manage to break up the trendline, then we may see a rally towards the 1.07 price area and possibly even higher towards 1.08, which will be the last line of defence for the sellers. This is unlikely to happen though unless the economic data start to miss expectations. On the 1 hour chart below, we can see that the price has come into the strong 1.06 handle where the sellers have also the confluence with a previous swing level resistance, the trendline and the 50% Fibonacci retracement level. A break above the trendline would be a bad omen for the sellers and give the buyers some conviction for a bigger pullback. The moving averages have crossed to the downside, so the sellers may be already in control. This article was written by ForexLive at www.forexlive.com.
On the daily chart below, we can see that after breaking down the 1.07 level, the sellers started to target the 1.05 handle. The whole move up from 1.02 to 1.10 diverged with the MACD, which is a signal of a loss of momentum. When the price breaks the trendline, it often comes all the way back to where the divergence started, which in this instance would be the 1.02 handle.
Before coming to that, the sellers will need to break the strong 1.05 support. The fundamentals have turned in favour of the USD in February as many key economic reports started to come in better than expected and prompt the market to price in a higher terminal rate and no rate cuts this year.
On the 4 hour chart below, we can see that from 1.08 the price started to diverge with the MACD and in fact we got a slow move downward with many pullbacks. This may be a sign that the market is not convinced yet by the February data and wants to see more to confirm the new trend. The price yesterday rallied into the downward trendline and found resistance.
This is the first spot where the sellers should start to pile in targeting the 1.05 level. If the buyers manage to break up the trendline, then we may see a rally towards the 1.07 price area and possibly even higher towards 1.08, which will be the last line of defence for the sellers. This is unlikely to happen though unless the economic data start to miss expectations.
On the 1 hour chart below, we can see that the price has come into the strong 1.06 handle where the sellers have also the confluence with a previous swing level resistance, the trendline and the 50% Fibonacci retracement level.
A break above the trendline would be a bad omen for the sellers and give the buyers some conviction for a bigger pullback. The moving averages have crossed to the downside, so the sellers may be already in control.
This article was written by ForexLive at www.forexlive.com.
