Euro "Stutter Step"?
- EUR/USD fails at key moving average
- Spot approaching critical pivot zone
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
The failure last week in EUR/USD to materially break below the 1.0820 May low prompted a fairly aggressive short covering rally back towards the middle of the three month range and the 50-day moving average. However, the exchange rate’s failure to close above the widely watched moving average earlier this week suggests the recovery was just a minor stutter step and keeps the euro in a clear negative technical position on the daily chart. The 1.0800 area remains a critical pivot zone as a close below there should confirm a resumption of the broader downtrend and set into motion a more important decline in the weeks ahead. Immediate resistance is seen around the 20-day moving average at 1.0980, but only traction over 1.1100 meaningfully improves the negative near-term technical outlook.
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EUR/USD Daily Chart: July 31, 2015
Charts Created using Marketscope – Prepared by Kristian Kerr
LEVELS TO WATCH
Resistance: 1.0980 (20-day MA), 1.1095 (50-day MA)
Support: 1.0920 (Gann) 1.0807 (MTD low)
Strategy: Sell EUR/USD
Entry: Sell EUR/USD on a daily close below 1.0800
Stop: Daily close above 1.0865
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.