EUR/USD Technical Highlights:
- EUR/USD trend is lower, poised to break down soon
- Short-term and long-term bearish outlooks in alignment
The EUR/USD has been holding up lately as it demonstrates general outperformance by simply not going down, which isn’t saying much for it. This looks set to change as the longer-term downtrend continues to exert pressure.
The very near-term level to watch is 9944, the low of the recent range the EUR/USD has been stuck in. A break beneath there will bring in the cycle lows at 9863. This could come as soon as this week with the FOMC rate decision tomorrow driving markets.
A drop beneath there will bring into focus the underside channel line dating back to early in the year. The line is quite a distance lower from here, but given the strength of the broader dollar trend is would seem likely we see it relatively soon. The line currently resides beneath 9500.
On the top-side there is resistance for EUR/USD around 10090 and the top of the channel running off from February. Should we see a pop into resistance it could offer would-be sellers a spot to sell. A breakout of the channel and above 10200 will be needed to turn things around towards a bullish bias.
For now, running with the downside until there are clear signs it has run its course. There will come points if the trend persists where oversold bounces will develop, but the broader forces continue to look heavily in favor of those betting on lower prices. The long-term level that could come into play at some point is the 2000 low around 8200.
EUR/USD Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
