EURUSD - Dips Favored Following Week of Monster Momentum
- EURUSD blasts through important technical hurdles
- Finished last week above another key level, turning old resistance into new support
- Overbought in the short-run, but trend and momentum favor dip-buyers
See what’s driving EURUSD this quarter, check out our Q2 forecast.
Last week, EURUSD put in a monster performance by rising nearly 3 big-figures. Heading into last week, the trend-line we were focused on which extends down from the 2016 high over the November U.S. election spike-high and the recent Macron victory gap, provided virtually no resistance. This is what we had to say about the technical landscape heading into last week: “If enough sponsorship can be found to push it through the trend-line, 5-month old upper parallel, and ‘Macron-high’ – there is plenty of upside potential.” Admittedly, that potential was realized quicker than anticipated.
The barrier surrounding the 11140-area penciled in as possible resistance proved only to be a short-lived hurdle. To close out the week the euro easily surpassed this critical area of resistance – which now makes it a source of support for traders to turn to on weakness.
Buyers may have pushed the single-currency into overbought territory for now, but momentum favors continued strength, with eyes set on the US presidential election day spike-high just under 11300 as the next level of resistance. Levels to look to beyond that point arrive quickly at 11327, 11366, and with an aggressive extension, 11429. But not to get ahead of ourselves – the euro could first use a little breather to reload for a push into those levels. This is where the ~11140 level will be watched with interest on weakness. Even if we see a deeper decline develop beneath noted support, the overall trend structure and momentum don’t favor a retracement lasting long.
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.