Neither a long nor short seems attractive on the EUR right now
Across the board, we saw the US dollar decline on Monday against the majority of its trading peers. This drove the EUR/USD higher, consequently clearing multiple tech resistances on the H4 timeframe. The single currency settled for the day challenging a H4 Quasimodo resistance pegged at 1.1823, which, as you can see, is shadowed closely by August’s opening level at 1.1830. According to the H4 candles on the US dollar index (USDX), there’s room for the dollar to stretch a little lower before we reach support at 11900. For that reason, there’s a chance the EUR may breach the two current resistances today.
Despite weekly action seen trading from resistance at 1.1871, price has yet to generate anything noteworthy to the downside. A similar picture can be seen on the US dollar index (USDX), only inverse from a weekly support drawn in at 11854. Down on the daily timeframe, demand at 1.1650-1.1733 elbowed its way back into the picture early last week and held firm. Yesterday’s rally from this zone has placed the market within touching distance of supply coming in at 1.1968-1.1862 (encapsulates the current weekly resistance line).
Suggestions: Selling this market is fraught with danger, in our humble view. Not only do we have buying pressure from the aforesaid daily demand zone, we also have a collection of nearby H4 supports lurking below (the 1.18 handle, the support area at 1.1792-1.1777 and a trendline support etched from the high 1.1910). Buying beyond the 1.1830 mark on the other hand looks interesting on the H4 timeframe, but unfortunately somewhat precarious on the daily timeframe given the supply zone positioned above!
Based on these points, opting to stand on the sidelines here may very well be the better path to take today.
Data points to consider: German ZEW economic sentiment at 10am GMT+1.
Despite weekly action seen trading from resistance at 1.1871, price has yet to generate anything noteworthy to the downside. A similar picture can be seen on the US dollar index (USDX), only inverse from a weekly support drawn in at 11854. Down on the daily timeframe, demand at 1.1650-1.1733 elbowed its way back into the picture early last week and held firm. Yesterday’s rally from this zone has placed the market within touching distance of supply coming in at 1.1968-1.1862 (encapsulates the current weekly resistance line).
Suggestions: Selling this market is fraught with danger, in our humble view. Not only do we have buying pressure from the aforesaid daily demand zone, we also have a collection of nearby H4 supports lurking below (the 1.18 handle, the support area at 1.1792-1.1777 and a trendline support etched from the high 1.1910). Buying beyond the 1.1830 mark on the other hand looks interesting on the H4 timeframe, but unfortunately somewhat precarious on the daily timeframe given the supply zone positioned above!
Based on these points, opting to stand on the sidelines here may very well be the better path to take today.
Data points to consider: German ZEW economic sentiment at 10am GMT+1.
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