EUR/USD Signal Update
No signals were given last Thursday.
Today’s EUR/USD Signals
No signals are given today.
EUR/USD Analysis
I saw last Thursday that a strong fall was possible if we were going to receive very strongly USD-positive high-impact news releases on Thursday and Friday. As it turned out, the data released on Friday did overall have a positive impact on the USD, mainly because of the unexpectedly high wage growth that the data presented. What then happened was a fall below the lower trend line of the bullish channel, and some support coming in around the whole number at 1.1300. The price has not really been able to get below this level.
It is hard to say exactly what is likely to happen next. Looking at the daily chart presented below, we can see that the candlestick formation made over the past several days is “barbed wire”: fairly wide range, full-bodied candles that reverse each day. This formation suggests ranging and indecision. Therefore although we are in a long-term bearish trend, have broken down below a bearish channel, and exist in an atmosphere of political uncertainty for the Euro, it feels a little too early to be short. The obvious resistance level above is too far away from the current price to be useful. My colleague Christopher Lewis sees strong resistance at around the 1.1500 level.
There is local support at the key psychological number at around 1.1250 and I would want to see the price break below that before feeling sure that this ranging period is truly over.
There are no high-impact data releases scheduled for later today concerning either the EUR or the USD. Therefore it is likely to be a very quiet day for this pair, unless there is unforeseen news.