Richard Perry
Independent Analyst
EUR/USD
We have been looking for a euro technical rally for several sessions and finally, there was some kind of pressure release for the oversold position on EUR/USD. A strong positive candle added +60 pips and broke the sequence of selling pressure. Is this the buy signal we have been waiting for? It is too early to say. A two and a half week downtrend may have been broken, but aside from RSI above 30 (the most basic of buy signals on momentum) there is little confirmation yet. There need to be bull crosses confirmed on MACD and Stochastics, which is not the case so far. Today’s corrective slip back now needs to build support this morning, for a higher low (ideally above $1.0800) to help develop the support at $1.0775. The hourly chart shows how the resistance of an old low was a barrier on Friday at $1.0865, and this will now become a key resistance in the coming days if a rally is to take hold. Trading back above $1.0825 (the original resistance for a recovery) will improve again, whilst $1.0840 (overnight high) is also a level to watch. EUR/USD looks as though it could be a market in transition, but far more needs to seen first. Above $1.0865/$1.0875 opens $1.0980.
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