EUR/USD Technical Outlook
EUR/USD – Trendless Move
On April 6, EUR/USD corrected its downtrend move as created a higher low at 1.0768. On Friday, the pair printed 1.0952 then retreated after. Yet, the weekly candlestick closed with 1.2% gain. This week, the price traded in a sideways move as carved out a lower high at 1.0991.
This week, the Relative Strength Index (RSI) crossed below 50, signaling a possible start of downtrend momentum.
EUR/USD Daily PRICE CHART (OCT 3, 2018 – APRIL 17, 2020) Zoomed Out
EUR/USD Daily Price CHART (FEB 1– April 17, 2020) Zoomed in
Looking at the daily chart, we noticed that on Tuesday EUR/USD rebounded from the high end of current trading zone 1.0822- 1.0992. in the following day, the price declined then closed below the 50-day average generating a bearish signal.
Thus, a close below the low end of the low end of the zone could send EURUSD towards 1.0719. Further close below that level may encourage bears to press towards 1.0498. In that scenario, the daily and weekly support levels underlined on the chart should be kept in focus.
On the flip side, any failure in closing below the low end of the zone could reverse the market’s direction towards the high end of the zone the high end of the zone. Further close above that level may cause a rally towards 1.1241. Having said that, the weekly resistance levels printed on the chart should be monitored.
EUR/USD four Hour Price CHART (MAR 20 – April 17, 2020)
From the four-hour chart, we noticed that yesterday EUR/USD broke below the uptrend line originated from the March 20 low at 1.0637 generating a bearish signal. Today, the price tested the uptrend line yet, failed to overtake it and cancel that signal.
Thus, a break below the April 6 low at 1.0768 would generate another bearish signal. This increases the likelihood of EURUSD to fall towards 1.0719. Although, the weekly support level underscored on the chart should be watched closely. In turn, any break in the other direction i.e. above 1.0911 may cause a surge towards the high end of current trading zone discussed above on the daily chart. Nevertheless, the daily resistance level marked on the chart should be considered.
See the chart to know more about key technical levels in a further bullish/bearish scenario.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
