The EUR/USD pair has been very negative as of late but once you zoom out you can see that we have been here before. We had crashed into the 1.12 level during the month of February, only to turn around and bounce even higher. We still haven’t made a “lower low” yet, so it’s likely that the market is going to have to make a rather significant decision at this point.
The 1.12 level is massive support as it is not only the bottom of the range, but it is also the scene of the 61.8% Fibonacci retracement level from the absolute bottom. I have an ellipse drawn on the chart that suggests we are trying to build up enough momentum to finally accumulate buyers and push higher. If we can break above the 1.1260 level it’s likely that we would go back towards the upper part of the overall range. When looking at longer-term charts, the 1.12 level is the bottom, while the 1.15 level is the top. That doesn’t mean that this market is going to be an easy trade in one direction or the other, but right now it seems as if a grind higher is very possible.
At the other end of the spectrum is a potential break down. If we break down below the 1.1150 level it’s likely that we could go down to the 1.11 handle, and then possibly even the 1.10 level. That would be an extraordinarily bullish move for the greenback in general, which is overbought to say the least around the currency world. That being said, it’s very likely that we will see an attempt to break out to the upside but we are clearly at an inflection point. Longer-term, I still believe that the US dollar will soften later this year, but right now a bit of confidence building is necessary.
The 1.12 level is massive support as it is not only the bottom of the range, but it is also the scene of the 61.8% Fibonacci retracement level from the absolute bottom. I have an ellipse drawn on the chart that suggests we are trying to build up enough momentum to finally accumulate buyers and push higher. If we can break above the 1.1260 level it’s likely that we would go back towards the upper part of the overall range. When looking at longer-term charts, the 1.12 level is the bottom, while the 1.15 level is the top. That doesn’t mean that this market is going to be an easy trade in one direction or the other, but right now it seems as if a grind higher is very possible.
At the other end of the spectrum is a potential break down. If we break down below the 1.1150 level it’s likely that we could go down to the 1.11 handle, and then possibly even the 1.10 level. That would be an extraordinarily bullish move for the greenback in general, which is overbought to say the least around the currency world. That being said, it’s very likely that we will see an attempt to break out to the upside but we are clearly at an inflection point. Longer-term, I still believe that the US dollar will soften later this year, but right now a bit of confidence building is necessary.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.