Euro vs US Dollar Technical Outlook
- EUR/USD slows down its rally as Coronavirus fears return
- EUR vs USD price chart exposes a weaker bullish momentum
EUR/USD- Weaker Buying Pressure
On Friday, EUR/USD rallied to an over eleven-week high at 1.1383 then closed the weekly candlestick in the green with a 1.6% gain.
This week, bulls have eased up amid concerns that a resurgence of the Covid-19 cases in some southern and westerns US states could pause the recovery in economies reopening from lockdowns.
EUR/USD DAILY PRICE CHART (AUG 20, 2018 – June 12, 2020) Zoomed Out
EUR/USD DAILY PRICE CHART ( March 27 – June 12, 2020) Zoomed IN
On May 25, EUR/USD carved out a higher low at 1.0870 hinting that the scale was tipping towards bull’s side. Therefore, the market ended its sideways move and rallied above well-defined resistance levels.
On Wednesday, the price printed its highest level in three months at 1.1422 nonetheless, the pair declined to the current trading zone 1.1205 -1.1370 signaling a weaker bullish sentiment.
A close below the low end of the aforementioned trading zone reflects bulls hesitation and could send EURUSD towards 1.1097. Any further close below that level may send the price even lower towards 1.0992.
On the other hand, a close above the high end of the zone signals that bulls could push towards 1.1508. Any further close above that level may extend the rally towards 1.1639.
EUR/USD Four-Hour PRICE CHART (May 1 – June 12, 2020)
Last week, EUR/USD rebounded from 1.1383 then retreated to the current trading zone discussed above on the daily chart and flattened its upward trend indicating that bulls were losing steam. At present, the market trades above the uptrend line originated from the June 4 low at 1.1194 that said, any violation of this line would generate a bearish signal.
A break below 1.1179 could send EURUSD towards 1.1116 on the other hand, any break above 1.1433 could trigger a rally towards 1.1508. Nonetheless, the daily support and resistance marked on the four-hour chart should be monitored.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
