EUR/USD: there could be a near term rally building on the euro [Video]
|EUR/USD
We have been wondering in recent days whether there could be a near term rally building on the euro. Yesterday’s bull candle (which added around +25 pips) was the most positively configured one day candle for almost four weeks. Importantly, after putting pressure on $1.1000 repeatedly in recent sessions, this move has now started to pull away from the $1.0980/$1.1000 support area. The move is building small improvements in daily momentum indicators, with a tick higher on RSI and Stochastics, but it is on the hourly chart where the improvement can really be seen. Hourly RSI is building above 40 and taking a stronger configuration, whilst hourly MACD lines are consistently above neutral. A first lower high (at $1.1027) was broken yesterday, but the move needs to break above resistance at $1.1035/$1.1040 for confirmation of the near term improvement. Despite all this though, it is important not to lose sight of the multi-week downtrend channel that is still the dominant chart pattern of the moment. Overhead supply really does begin to weigh above $1.1065 and this rally could still be short-lived. Trading higher against the downtrend is a risky strategy and we have to be eyeing the next opportunity to sell.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.