EURUSD - Confluence of Support Key to Near-term Outlook
- EURUSD still sporting a bullish posture as long as confluence of support not far below holds
- A break would shift gears towards 11000
- On a hold of support, looking for a move to develop towards 11400.
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At the June monetary policy meeting on Thursday, Draghi and the ECB erred on the dovish-side – the result was minor pressure on the euro, but nothing overly damaging to a currency which is still viewed through a sound technical lens. That is as long as support levels not far below hold. The mid-111s are the focus as important support, an area which dates back to August of last year. A key bullish reversal on 5/30 on a failed attempt to break through helped cement this area as significant. Coming into confluence with price support is a rising trend-line beginning back in April. A touch and reverse at that juncture could offer an attractive spot for traders to join the trend higher. Should it break, then a gear shift towards seeing a deeper retracement back towards 11000 becomes the focus.
On the top-side, there is a thicket of resistance levels EURUSD must clear through; the anticipation on this end is that as long as support holds on the current dip we will see a move towards the upper end of the resistance zone ending not far beyond the 11400 threshold. Resistance levels are in close proximity to one another, starting with the 6/2 high at 11285, 11300, 11327, 11366, then 11428. On any move which progresses into those levels we’ll keep a watchful eye out for reversal activity indicating the move may have come to an end.
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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.