Short-Term Resistance Eyed for the EUR/USD
Month to date, versus the US dollar, Europe’s single currency is lower by -1.3% and has erased all of December’s upside.
Multi-Timeframe Technical Approach Highlights Nearby Resistance
The Research Team acknowledged the following in recent analysis regarding the monthly timeframe (italics):
Overall, the currency pair has been in a downward trend since 2008, fashioned through a series of lower lows and lower highs evident on the monthly chart. Also apparent from this chart, the pullback from the September (2022) low of $0.9536 could be viewed as a long-term sell-on-rally scenario.
Monthly resistance warrants attention overhead at $1.1233 and shares chart space with a 50-month simple moving average (SMA) at $1.1149. Equally, support from $1.0516 is noteworthy, a level that welcomed buyers in November 2023. Ultimately, given the downtrend in the EUR/USD, $1.1233 resistance will likely be a difficult barrier to penetrate and, thus, perhaps encourage selling if challenged again. Breaching current support, therefore, might be the long-term technical objective as of now, opening the door towards monthly support at $0.9873.
From the daily timeframe, you will note that price movement concluded the week flanked by the 50-day and 200-day simple moving averages at $1.0896 and $1.0845, respectively. You may recognise the pair discovered support from the latter in the second half of last week, and a Golden Cross materialised earlier this month—a long-term trend reversal signal, which somewhat conflicts against current price action: a fresh lower low that indicates the early phase of a downtrend. Beyond the moving averages, resistance is at $1.1011 and support falls in at $1.0758 (complemented by a 61.8% Fibonacci projection ratio and a 100% projection ratio at $1.0739 [a simple harmonic AB=CD pattern]).
Meanwhile, the short-term H1 chart finished the week on the doorstep of a resistance zone between $1.0907 and $1.0900. Albeit small, the area consists of several technical tools to form rather meaningful confluence, including trendline resistance extended from the high of $1.1139, a double-bottom pattern’s neckline and Fibonacci retracement ratios. Should price engulf this resistance area this week, buyers could enter the fray based on the double-bottom pattern’s ($1.0845) completion (neckline breach), in which a profit objective tends to be derived from the base value and extended from the breakout point (in this case, $1.0969).
Direction for the Week Ahead?
Having noted the longer-term monthly trend facing south, and price action on the daily timeframe showing signs of an early downtrend (lower high followed by a subsequent lower low), as well as daily price ending the week testing the underside of the 50-day SMA at $1.0896, the H1 resistance zone between $1.0907 and $1.0900 could be a location sellers draw to in early trading this week. However, in the event of a breakout higher, not only would this see daily price navigate terrain north of the 50-day SMA, it would also essentially deliver the green light for short-term longs based on the H1 double-bottom pattern, targeting $1.0969.
Multi-Timeframe Technical Approach Highlights Nearby Resistance
The Research Team acknowledged the following in recent analysis regarding the monthly timeframe (italics):
Overall, the currency pair has been in a downward trend since 2008, fashioned through a series of lower lows and lower highs evident on the monthly chart. Also apparent from this chart, the pullback from the September (2022) low of $0.9536 could be viewed as a long-term sell-on-rally scenario.
Monthly resistance warrants attention overhead at $1.1233 and shares chart space with a 50-month simple moving average (SMA) at $1.1149. Equally, support from $1.0516 is noteworthy, a level that welcomed buyers in November 2023. Ultimately, given the downtrend in the EUR/USD, $1.1233 resistance will likely be a difficult barrier to penetrate and, thus, perhaps encourage selling if challenged again. Breaching current support, therefore, might be the long-term technical objective as of now, opening the door towards monthly support at $0.9873.
From the daily timeframe, you will note that price movement concluded the week flanked by the 50-day and 200-day simple moving averages at $1.0896 and $1.0845, respectively. You may recognise the pair discovered support from the latter in the second half of last week, and a Golden Cross materialised earlier this month—a long-term trend reversal signal, which somewhat conflicts against current price action: a fresh lower low that indicates the early phase of a downtrend. Beyond the moving averages, resistance is at $1.1011 and support falls in at $1.0758 (complemented by a 61.8% Fibonacci projection ratio and a 100% projection ratio at $1.0739 [a simple harmonic AB=CD pattern]).
Meanwhile, the short-term H1 chart finished the week on the doorstep of a resistance zone between $1.0907 and $1.0900. Albeit small, the area consists of several technical tools to form rather meaningful confluence, including trendline resistance extended from the high of $1.1139, a double-bottom pattern’s neckline and Fibonacci retracement ratios. Should price engulf this resistance area this week, buyers could enter the fray based on the double-bottom pattern’s ($1.0845) completion (neckline breach), in which a profit objective tends to be derived from the base value and extended from the breakout point (in this case, $1.0969).
Direction for the Week Ahead?
Having noted the longer-term monthly trend facing south, and price action on the daily timeframe showing signs of an early downtrend (lower high followed by a subsequent lower low), as well as daily price ending the week testing the underside of the 50-day SMA at $1.0896, the H1 resistance zone between $1.0907 and $1.0900 could be a location sellers draw to in early trading this week. However, in the event of a breakout higher, not only would this see daily price navigate terrain north of the 50-day SMA, it would also essentially deliver the green light for short-term longs based on the H1 double-bottom pattern, targeting $1.0969.
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.