News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
More View more
Real Time News
  • Fed's Kaplan: - Expecting above trend growth for 2021 - Local and state governments need grants, not loans from Fed - Dow Jones via BBG
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.23%, while traders in NZD/USD are at opposite extremes with 66.26%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/TLR8MDhm9L
  • $USD $DXY | US Dollar Ripping Higher as Markets Swoon Link to Analysis via @DailyFX - https://www.dailyfx.com/forex/market_alert/2020/09/21/usd-price-outlook-us-dollar-ripping-higher-as-markets-swoon.html #FX #Forex #Trading https://t.co/sVaB9lrjxu
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Gold: -2.40% Oil - US Crude: -4.81% Silver: -8.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/bO6biPyCKp
  • UK COVID alert level has moved from level 3 to level 4
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.14% 🇨🇭CHF: -0.56% 🇨🇦CAD: -0.70% 🇬🇧GBP: -0.93% 🇦🇺AUD: -1.14% 🇳🇿NZD: -1.44% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/GIoEwFiMLN
  • The DXY continues to build on a rebound off long-term uptrend support and the Majors are poised for some decent moves this week. Get your #DXY market update from @MBForex here: https://t.co/bjbs0gYT6I https://t.co/0OapScLca9
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: France 40: 0.50% Germany 30: 0.49% FTSE 100: 0.32% US 500: -2.12% Wall Street: -2.95% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/nultu65SC6
  • UK PM Johnson is to announce a 10pm closing time for pubs tomorrow, according to the Sun
  • NI First Minister says local COVID 19 restrictions currently in place will apply to the whole of Northern Ireland from Tuesday
Euro Price Analysis: EUR/USD Breaks Above Key Level of Prior Resistance

Euro Price Analysis: EUR/USD Breaks Above Key Level of Prior Resistance

2020-07-22 15:30:00
Tammy Da Costa, Markets Writer
Share:

EUR/USD Forecast:

  • USD remains under pressure as US-China tensions rise
  • EUR/USD trading at key Fibonacci levels
  • Will bulls be able to break through key area of resistance or is the pair overbought, as indicated by the RSI?

Bulls Look for a Break Above Key Fibonacci Level

The EU summit ended yesterday with EU leaders securing a 750 billion recovery fund, aimed at supporting European economies to recover from the effects of the coronavirus pandemic. As a result, inflows into the euro have accelerated, while growing US-China tensions, combined with an increase in the number of coronavirus cases in the US, continues to add pressure to the Dollar.

Trading Forex News: The Strategy
Trading Forex News: The Strategy
Recommended by Tammy Da Costa
How can news impact your trades?
Get My Guide

The weekly chart below highlights Fibonacci levels from two major moves. The first Fibonacci retracement (pink) is taken from the January 2017 low to the February 2018 high (the medium-term move), while the second Fibonacci retracement (purple), represents the shorter-term move between the February 2018 high and the March 2020 low.

Since August 2019, the EUR/USD has been trading in a key area of confluence between the 76.4% and 61.8% retracement of the medium-term Fibonacci. This relatively tight span containing the two above-mentioned Fibonacci levels has formed clear areas of support and resistance. However, after breaking through the 61.8% level (1.11846), price action has favored the bulls, with the 50% retracement of the medium-term move now forming a level of support at 1.14407.

EUR/USD Weekly Chart

EUR/USD Weekly Chart

Chart created by Tammy Da Costa, IG

RSI Suggests EUR/USD May be Overbought

With Fibonacci levels holding strong, the RSI indicates that the EUR/USD may be entering into overbought territory. While the Relative Strength Index (RSI) is a technical indicator which is commonly used to measure the momentum of the trend, it is often used to determine when a financial instrument enters into periods of overbought or oversold territory.

As highlighted on the 4 hour chart below, the RSI is trading above 70, signaling that although a strong upward trend is present, the pair may be entering into overbought territory. Should the RSI cross from above the 70 line towards the downside, bears may see it as a sign that a reversal may be on the cards.

EUR/USD 4-Hour Chart

EUR/USD 4-Hour Chart

Chart prepared by Tammy Da Costa, IG

Looking Ahead

As price action continues to fluctuate between the short-term and medium-term Fibonacci levels, bulls continue to fight for a breakout above the 50% retracement of the shorter-term Fibonacci at 1.15990, towards the psychological level of 1.16. Should this level be broken, the upside may prevail with the 38.2% retracement of the medium-term Fibonacci providing resistance at 1.17095.

Meanwhile, bears may be looking for an opportunity of a reversal should prices fall below 1.14471, which is the 50% retracement of the medium-term move. If this level is broken, the 38.2% retracement of the shorter-term move, may be the next level of support at 1.13724.

Traits of Successful Traders
Traits of Successful Traders
Recommended by Tammy Da Costa
What is the number one mistake made by traders?
Get My Guide

Client Sentiment

EUR/USD Client Sentiment

According to client sentiment, at the time of writing, majority of retail traders are showing a bearing bias towards EUR/USD, with 71% of traders holding short positions. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests that the EUR/USD may rise.

{{Webinar| 586549347|Learn how to identify trendy with trader sentiment}}

--- Written by Tammy DaCosta, Market Writer for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

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

DISCLOSURES