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Euro Price Action Update: EUR/USD at the Beginning of a Broader Bearish Reversal?

Euro Price Action Update: EUR/USD at the Beginning of a Broader Bearish Reversal?

Daniel Dubrovsky, Contributing Senior Strategist

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Euro, EUR/USD, 100-day MA Breakout – Technical Update:

  • The Euro closed at its lowest since early July on Monday
  • EUR/USD also broke under the 100-day moving average
  • The 4-hour chart gives us a better idea of support levels
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The US Dollar might be readying to extend losses against the Euro. On the daily chart below, EUR/USD has closed under the 100-day Moving Average (MA). While confirmation is lacking at this time, further downside progress could offer an increasingly bearish technical bias. EUR/USD also closed at its lowest since early July.

From here, immediate support is the July low of 1.0834. A downside breakout exposes lows from May and June. Otherwise, a turn back above the 100-day MA and a false breakout places the focus on immediate resistance at 1.1003, which is the 23.6% Fibonacci extension level. Further gains above that may open the door to revisiting the July high.

image1.png

Chart Created in TradingView

Zooming in on the 4-hour chart can give us a better idea of how the near-term trend is shaping up. On this timeframe, we can see how EUR/USD confirmed a breakout above near-term rising support from June. Meanwhile, falling resistance from July has been helping maintain the downward technical bias. On this chart, immediate support can be seen better as the 1.0833 – 1.0859 support zone.

If this area holds, it could send prices higher toward a retest of the falling trendline from July. This could maintain the near-term bearish technical bias. Otherwise, a breakout higher exposes the 23.6% Fibonacci retracement level of 1.1124. On the other hand, a breakout and confirmation of immediate support exposes the 78.6% level of 1.0771 as prices fall towards 1.0634.

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image2.png

Chart Created in TradingView

--- Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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