EUR/USD Technical Analysis: Buyers Aiming for 1.3338 Resistance
EUR/USD TECHNICAL STRATEGY: BEARISH
- EUR/USD aiming for 1.3339 resistance
- How long can it last above key barrier?
- A failure to breach could be bearish
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Following the drop caused by the ECB rate decision and outlook, EUR/USD turned around at 1.119 and has continued to rise along a frequently-tested support range on the 4-hour chart below Despite breaking through it yesterday, the pair appear to be mounting up for a possible re-entry. A resumption above the dominant support would strengthen the case that the pair is aiming toward 1.3339.
EUR/USD – Four-Hour Chart
Taking a bird’s eye view with a daily chart reveals a choppy congestion prior to the ECB’s outlook which led the Euro to a two-year low. A failure to breach the psychological barrier at 1.3339 and maintain its momentum would suggest weak confidence in the Euro’s ability to recover from its gloomy prospects. This would be a boon for the bears and a kick to the bulls.
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EUR/USD – Daily Chart
Immediate fundamental risk by way of the US’ University of Michigan sentiment survey which may give a boost to EUR/USD, should the data fall short of expectations. However, the sugar high from a possible underperformance is not likely to deliver substantial follow through for the pair, considering the longer-term risks the Euro faces in the coming weeks and rest of the year which may keep it pressured below key barriers.
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.