EUR/USD likely to stay in range, short term bears gain traction
The euro has begun the trading week extended losses, as the pair rejects the resistance at 1.1320 levels (upper BB, see circled area) on 18th March and began tumbling from there.
Currently, testing supports at 1.1210 levels (7DMA, 10th highs), but likely to break that exposes more bearish targets.
RSI (14) on daily chart diverging to the previous rallies and being bearish bias (Currently, daily RSI trending below at 56 right 70 levels). This overbought environment has resulted in the selling momentum when prices touched 1.1320 by taking the computation of last 14 day periods the magnitude of recent gains to recent losses in an attempt to signifying the overbought pressures.
While %D crossover on daily on slow stochastic curve with every price dips signals selling momentum is rising (Currently, %D line trending below 81, while %K line below 70).
On the contrary, both RSI and Stochastic curves on monthly chart signals oversold pressure, this may lead the price behaviour of this pair in a long lasting range.
We think the pair from here onwards largely bearish, if it doesn't manage to hold onto the current level, then the next strong support can be seen at 1.1080 levels in short term.
Long term investors should be cautious, even if it holds the current levels, we see restricted upside potential at around 23.6% fibo levels, at this juncture momentum in previous rallies likely to collapse, long term downtrend seems intact. Hence, in long run we still project below a cyclical lows 1.10 but between the range of 1.08-1.09 by Q2'2016 end.
Currently, testing supports at 1.1210 levels (7DMA, 10th highs), but likely to break that exposes more bearish targets.
RSI (14) on daily chart diverging to the previous rallies and being bearish bias (Currently, daily RSI trending below at 56 right 70 levels). This overbought environment has resulted in the selling momentum when prices touched 1.1320 by taking the computation of last 14 day periods the magnitude of recent gains to recent losses in an attempt to signifying the overbought pressures.
While %D crossover on daily on slow stochastic curve with every price dips signals selling momentum is rising (Currently, %D line trending below 81, while %K line below 70).
On the contrary, both RSI and Stochastic curves on monthly chart signals oversold pressure, this may lead the price behaviour of this pair in a long lasting range.
We think the pair from here onwards largely bearish, if it doesn't manage to hold onto the current level, then the next strong support can be seen at 1.1080 levels in short term.
Long term investors should be cautious, even if it holds the current levels, we see restricted upside potential at around 23.6% fibo levels, at this juncture momentum in previous rallies likely to collapse, long term downtrend seems intact. Hence, in long run we still project below a cyclical lows 1.10 but between the range of 1.08-1.09 by Q2'2016 end.
