EUR/USD outlook: Reversal signal developing on daily chart

Slobodan Drvenica Windsor Brokers

EUR/USD

EURUSD regained traction and rose above 1.08 handle in early US trading on Friday, as hotter than expected US inflation and higher consumer spending failed to impress traders, concerned about slower economic growth.

Fresh strength broke above the top of two-day congestion and generating initial basing and reversal signal after recent pullback from 1.0954 (Mar 18 top) was contained by strong support at 1.0727 (Fibo 38.2% of 1.0360/1.0954 / 200DMA).

This also points to scenario of a healthy correction of larger uptrend and overall bullish structure intact.

Technical studies on daily chart are about to return to full bullish setup as 14-d momentum is about to enter positive territory and moving averages are in bullish configuration and heading north.

Daily close above 1.0800/17 (round-figure / Fibo 38.2% of 1.0954/1.0732 bear-leg) will be required to keep fresh bullish structure intact for attack at 1.0843 (daily Tenkan-sen / 50% retracement) and 1.0869 (Fibo 61.8%) violation of which to confirm reversal.

Initial supports lay at 1.0800/1.0782 (round-figure / broken Fibo 23.6% and guard key support at 1.0727.

Res: 1.0843; 1.0869; 1.0902; 1.0954.
Sup: 1.0800; 1.0782; 1.0727; 1.0700.

Interested in EUR/USD technicals? Check out the key levels

1. R3 1.0926
2. R2 1.0874
3. R1 1.0838
PP 1.0786
1. S1 1.075
2. S2 1.0698
3. S3 1.0662

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD clings to strong gains above 1.1850 on USD weakness

EUR/USD preserves its bullish momentum to start the week and trades above 1.1850. The US Dollar struggles to find demand ahead of Wednesday's critical January employment report and helps the pair continue to push higher.

GBP/USD hovers near 1.3600 as UK government crisis weighs on Pound Sterling

GBP/USD moves sideways after registering modest gains in the previous session, trading around 1.3610 during the European hours on Monday. The pair could come under pressure as the Pound Sterling may weaken amid a fresh government crisis in the United Kingdom.

Gold holds steady above $5,000

Gold builds on the gains it posted to end the previous week and holds steady above $5,000 on Monday. Data released over the weekend showed that the People's Bank of China extended its Gold buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.