EUR/USD to strengthen above 1.08?
Monthly timeframe:
Partially altered outlook from previous analysis –
Despite a healthy attempt at recovery from demand at 1.0488/1.0912 in October 2019 – a particularly noteworthy area given the momentum derived from its base – EUR/USD failed to sustain gains, and had the unit retesting its upper boundary last week, with price beginning to tunnel through its range, as we write.
Although down 2.66% on the month and in-line with the primary downtrend, which has been lower since 2008, we cannot rule out the possibility of fresh upside attempts from current demand yet.
Additional structure worth noting on the monthly timeframe is demand-turned supply at 1.1857/1.1352 and a reasonably ‘fresh’ demand area coming in at 0.9581/1.0221.
Daily timeframe:
Partially altered outlook from previous analysis –
Since retesting supply at 1.1117/1.1078, the unit has retained a strong underlying offer, consuming a demand zone at 1.1001/1.0946, dethroning the 1.0879 October 1st low and recently bottoming a few points ahead of demand at 1.0680/1.0781 (formed April 2017 and houses a 127.2% Fibonacci ext. point within at 1.0724).
The RSI is also seen testing channel support.
H4 timeframe:
As underlined in previous writing, demand at 1.0832/1.0877 echoed a fragile tone since late last week, having its lower edge absorbed Friday and tested further on Monday. We can see buyers abandoned the said demand Tuesday, as sellers continued to glean resistance from channel support-turned resistance (1.1034 – yellow).
The next area of interest falls in reasonably close by at demand from 1.0738/1.0774.
Another area of interest is a recently formed local supply zone at 1.0838/1.0823, essentially the decision point to drop lower. As you can see, this area was tested shortly after forming – the 1.0825 high.
H1 timeframe:
The euro surrendered further ground against the US dollar Tuesday, weighed by disappointing data out of Germany.
According to ZEW, the ZEW Indicator of Economic Sentiment for Germany decreased sharply in February, falling 18.0 points to a new reading of 8.7 points. The indicator is thus slightly below its December 2019 level. The assessment of the economic situation in Germany has also worsened compared to the previous month, with the corresponding indicator dropping to a level of minus 15.7 points, 6.2 points lower than in January.
In addition to the above, the NY Empire State Manufacturing Index advanced sharply in February, bolstering the US dollar across the board. The empire state manufacturing survey noted: Business activity picked up in New York State, according to firms responding to the February 2020 Empire State Manufacturing Survey. The headline general business conditions index moved up eight points to 12.9. The new orders index shot up 16 points to 22.1, and the shipments index climbed to 18.9.
Technical action had the candles grinding the underside of the 50-period SMA, eventually forcing a move south of the 1.08 handle, before pulling back and retesting the decision point, the supply zone at 1.0837/1.0824, which, as you can see, held ground.
The day closed a touch beneath 1.08, with the RSI indicator seen trading nearby oversold terrain.
Direction:
Longer term, we could eventually see a rebound higher from monthly demand at 1.0488/1.0912, as underlined in Monday’s technical report. However, given daily price is also seen trading within a whisker of demand at 1.0680/1.0781, that recovery attempt may come sooner rather than later.
Shorter-term focus shows H4 price has room to approach demand coming in at 1.0738/1.0774, while H1 may retest the underside of 1.08 and hold.
Selling at current price, however, despite 1.08 giving way, is tricky. The top edge of daily demand is stationed within touching distance at 1.0781, and monthly price also trades from demand. Long plays above 1.08, therefore, might be a consideration.
Partially altered outlook from previous analysis –
Despite a healthy attempt at recovery from demand at 1.0488/1.0912 in October 2019 – a particularly noteworthy area given the momentum derived from its base – EUR/USD failed to sustain gains, and had the unit retesting its upper boundary last week, with price beginning to tunnel through its range, as we write.
Although down 2.66% on the month and in-line with the primary downtrend, which has been lower since 2008, we cannot rule out the possibility of fresh upside attempts from current demand yet.
Additional structure worth noting on the monthly timeframe is demand-turned supply at 1.1857/1.1352 and a reasonably ‘fresh’ demand area coming in at 0.9581/1.0221.
Daily timeframe:
Partially altered outlook from previous analysis –
Since retesting supply at 1.1117/1.1078, the unit has retained a strong underlying offer, consuming a demand zone at 1.1001/1.0946, dethroning the 1.0879 October 1st low and recently bottoming a few points ahead of demand at 1.0680/1.0781 (formed April 2017 and houses a 127.2% Fibonacci ext. point within at 1.0724).
The RSI is also seen testing channel support.
H4 timeframe:
As underlined in previous writing, demand at 1.0832/1.0877 echoed a fragile tone since late last week, having its lower edge absorbed Friday and tested further on Monday. We can see buyers abandoned the said demand Tuesday, as sellers continued to glean resistance from channel support-turned resistance (1.1034 – yellow).
The next area of interest falls in reasonably close by at demand from 1.0738/1.0774.
Another area of interest is a recently formed local supply zone at 1.0838/1.0823, essentially the decision point to drop lower. As you can see, this area was tested shortly after forming – the 1.0825 high.
H1 timeframe:
The euro surrendered further ground against the US dollar Tuesday, weighed by disappointing data out of Germany.
According to ZEW, the ZEW Indicator of Economic Sentiment for Germany decreased sharply in February, falling 18.0 points to a new reading of 8.7 points. The indicator is thus slightly below its December 2019 level. The assessment of the economic situation in Germany has also worsened compared to the previous month, with the corresponding indicator dropping to a level of minus 15.7 points, 6.2 points lower than in January.
In addition to the above, the NY Empire State Manufacturing Index advanced sharply in February, bolstering the US dollar across the board. The empire state manufacturing survey noted: Business activity picked up in New York State, according to firms responding to the February 2020 Empire State Manufacturing Survey. The headline general business conditions index moved up eight points to 12.9. The new orders index shot up 16 points to 22.1, and the shipments index climbed to 18.9.
Technical action had the candles grinding the underside of the 50-period SMA, eventually forcing a move south of the 1.08 handle, before pulling back and retesting the decision point, the supply zone at 1.0837/1.0824, which, as you can see, held ground.
The day closed a touch beneath 1.08, with the RSI indicator seen trading nearby oversold terrain.
Direction:
Longer term, we could eventually see a rebound higher from monthly demand at 1.0488/1.0912, as underlined in Monday’s technical report. However, given daily price is also seen trading within a whisker of demand at 1.0680/1.0781, that recovery attempt may come sooner rather than later.
Shorter-term focus shows H4 price has room to approach demand coming in at 1.0738/1.0774, while H1 may retest the underside of 1.08 and hold.
Selling at current price, however, despite 1.08 giving way, is tricky. The top edge of daily demand is stationed within touching distance at 1.0781, and monthly price also trades from demand. Long plays above 1.08, therefore, might be a consideration.
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