EUR/USD Technical Highlights:
- EUR/USD treading water after bounce from just beneath parity
- May be a bit more upside in play before turning back lower
The EUR/USD bounce from under parity lost steam only a few days into the rally and since then it has moved generally sideways. With this development taking shape within the context of a strong downtrend we may soon see a resumption of weakness.
But before that occurs another round of strength may first unfold, however, it may not be the most tradable rally as momentum is lacking and strong resistance lies not too far ahead. A break above 10278 will have a pair of lows created this year in focus.
The lows clock in around the 10350-mark, which is a just a short distance away from the 2017 low at 10340. It is a meaningful area to pay attention to. Adding further weight to the mid-103s is the sturdy downward channel line from early this year.
The confluence between various points of resistance will make for an interesting test, assuming the Euro can rally that far. Right now the struggle is real as we are seeing a muted response by the market. Should this week’s low at 10096 break, then look for the recent low beneath parity at 9952 to come back into play.
Overall, more upside still looks like it could be in the cards, but if 10278 maintains and we see the weekly low break, then that notion will be off the table for now. From a risk/reward perspective, it would be ideal to see a rally to confluent resistance and subsequent failure for would-be shorts.
EUR/USD Daily Chart
EUR/USD Charts by TradingView
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX