Euro / US-DollarLong
1.0850 eyed as a potential reversal zone...
EUR/USD:
Monthly timeframe:
Brought forward from previous analysis:
Long term, EUR/USD’s primary trend has faced a southerly trajectory since topping in mid-July 2008, at 1.6038. Activity on the monthly chart remains languishing south of a resistance area at 1.2048/1.1653 as well as a trendline resistance (1.6038).
Downside risk remains on this timeframe until connecting with the support area marked at 1.0742/1.0333.
Daily timeframe:
It was emphasised in yesterday’s analysis that traders are likely anticipating resistance to form off 1.0962/1.0925. The underside of this zone held to the point, elbowing the pair to lower ground Wednesday and connecting with support at 1.0822/1.0879, boasting history as far back as March 2016.
The RSI also drove further into oversold territory, currently trades at 26.46.
H4 timeframe:
What’s interesting from a technical standpoint on the H4 timeframe is price retested the underside of a recently violated channel support as resistance, which happened to align with the daily resistance zone at 1.0962/1.0925.
1.0826/1.0851 rests as the next area of support, which houses a 161.8% Fibonacci ext. point at 1.0839. Note this H4 zone also resides within the lower boundary of the daily timeframe’s current support zone at 1.0822/1.0879.
H1 timeframe:
Europe’s single currency traded lower against the buck Wednesday, dropping more than 40 points, or 0.40%. This followed a revival in USD bidding, in which the US dollar index conquered the 99.00 handle.
On the data front, in December 2019 compared with November 2019, seasonally adjusted industrial production fell by 2.1% in the euro area (EA19) and by 2.0% in the EU27, according to estimates from Eurostat, the statistical office of the European Union.
Federal Reserve Chair Jerome Powell reiterated his confidence in the US economic outlook, even as he said he expected some drag “soon” from China’s coronavirus epidemic and called out the threat from income inequality and an expanding federal debt (Reuters).
Technically, EUR/USD tunnelled its way back into a descending channel (1.1014/1.0964). Another constructive development was the retaking of the 1.09 handle to the downside. The general sense is a push for mid-1.08s and its intersecting channel support (1.0964) today. Indicator flows has the RSI attempting to climb from oversold terrain, rebounding from familiar RSI support around 20.13.
Direction:
1.0850, based on the H1 timeframe, represents feasible support today. There are a number of technical aspects that support this view. Firstly, as underlined above, the H1 channel support convergence. Secondly, daily price is toying with a support area, confirmed by its RSI exhibiting oversold conditions, and thirdly, 1.0850 merges closely with the top edge of H4 support at 1.0851.
Monthly timeframe:
Brought forward from previous analysis:
Long term, EUR/USD’s primary trend has faced a southerly trajectory since topping in mid-July 2008, at 1.6038. Activity on the monthly chart remains languishing south of a resistance area at 1.2048/1.1653 as well as a trendline resistance (1.6038).
Downside risk remains on this timeframe until connecting with the support area marked at 1.0742/1.0333.
Daily timeframe:
It was emphasised in yesterday’s analysis that traders are likely anticipating resistance to form off 1.0962/1.0925. The underside of this zone held to the point, elbowing the pair to lower ground Wednesday and connecting with support at 1.0822/1.0879, boasting history as far back as March 2016.
The RSI also drove further into oversold territory, currently trades at 26.46.
H4 timeframe:
What’s interesting from a technical standpoint on the H4 timeframe is price retested the underside of a recently violated channel support as resistance, which happened to align with the daily resistance zone at 1.0962/1.0925.
1.0826/1.0851 rests as the next area of support, which houses a 161.8% Fibonacci ext. point at 1.0839. Note this H4 zone also resides within the lower boundary of the daily timeframe’s current support zone at 1.0822/1.0879.
H1 timeframe:
Europe’s single currency traded lower against the buck Wednesday, dropping more than 40 points, or 0.40%. This followed a revival in USD bidding, in which the US dollar index conquered the 99.00 handle.
On the data front, in December 2019 compared with November 2019, seasonally adjusted industrial production fell by 2.1% in the euro area (EA19) and by 2.0% in the EU27, according to estimates from Eurostat, the statistical office of the European Union.
Federal Reserve Chair Jerome Powell reiterated his confidence in the US economic outlook, even as he said he expected some drag “soon” from China’s coronavirus epidemic and called out the threat from income inequality and an expanding federal debt (Reuters).
Technically, EUR/USD tunnelled its way back into a descending channel (1.1014/1.0964). Another constructive development was the retaking of the 1.09 handle to the downside. The general sense is a push for mid-1.08s and its intersecting channel support (1.0964) today. Indicator flows has the RSI attempting to climb from oversold terrain, rebounding from familiar RSI support around 20.13.
Direction:
1.0850, based on the H1 timeframe, represents feasible support today. There are a number of technical aspects that support this view. Firstly, as underlined above, the H1 channel support convergence. Secondly, daily price is toying with a support area, confirmed by its RSI exhibiting oversold conditions, and thirdly, 1.0850 merges closely with the top edge of H4 support at 1.0851.
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