EUR/USD daily overview

FX:EURUSD   歐元 / 美元
The strong bullish momentum that prevailed in the market last week allowed the Euro to hit a new 2015/2018 high of 1.2550 against the US Dollar early on Friday. This sentiment did allay during the following hours, thus leaving the rate at the psychological 1.24 mark on Monday morning.

It is expected that this latest wave down was just a minor correction against the overall up-trend, as bulls were gaining strength for further appreciation within the following trading hours.

Meanwhile, this session should be relatively calm for the pair, as no significant fundamentals are to be released. Thus, the Euro is likely to fluctuate within the bounds of the 55– and 200-hour SMAs in the 1.2470/1.2350 territory. Supported by the weekly PP and the 100-hour SMA at 1.24, the pair could be tended slightly north.

As already expected, the common European currency remained stable against the US Dollar which was caused by lack of fundamental events that could introduce volatility in the market. Thus, the pair remained fluctuating around the weekly PP at 1.24 within the last 24 hours.

Even though the Euro was pushed slightly lower during the Asian session early on Tuesday, the market is expected to be guided by bulls, especially if the combined support of the 200-hour SMA and the 23.60% Fibo retracement is limiting the pair near the 1.2350 mark. Technical indicators are likewise supportive of the bullish scenario that should move the rate towards the 55– and 100-hour SMAs near 1.2440.

Given that no significant fundamentals are likewise apparent today, this resistance should not be breached.

Despite flashing bullish signals on Tuesday, the bearish momentum took over the market during the first part of the day, as the Euro managed to gather enough momentum to breach the 200-hour SMA and the 23.6% Fibo retracement. A further decline, however, did not follow, as the bottom boundary of a four-month channel circa 1.2320 restricted the pair from moving below this level.

It is likely that the pair tries to re-gain some of the lost positions during the following hours, but with limited success due to the combined resistance of the 200– and 55-hour SMAs being located near the 1.2370 mark.

Meanwhile, some volatility is likely to be introduced in the market later in the evening when the FOMC publishes its meeting minutes at 1900GMT.

The Euro was trading with low volatility during the first part of Wednesday. Higher volatility was introduced later in the evening when the FOMC released its meeting minutes. The Fed praised the strength of economic growth, while expressing concerns over missed inflation targets.

This statement resulted in an immediate upward pressure on the pair, which was soon overrun by the stronger Greenback. As a result, the session ended with a 56 pip decline in price.

Given that the prevailing senior channel was breach mid-session, traders might seen a decline in the medium term. However, in terms of the following session, the Euro is expected to bounce off the junior channel and the weekly S1 at 1.2240 to begin a brief period of recovery. Upside target for today—the 1.2380 area.

Bulls managed to regain some of their lost positions on Thursday, as the pair bounced off the bottom boundary of the junior channel and tested the 1.2340 mark later in the day.

The nearest resistance cluster formed by the 100-hour SMA and the 23.60% Fibo retracement proved to be an unbreakable barrier which sent the Euro for a slight decline.

Technical indicators demonstrate that the bullish sentiment should continue dominating in this session. However, the aforementioned resistance circa 1.2350, likewise reinforced by the 200-hour SMA, could put downward pressure on the rate once again, especially when no significant fundamentals are scheduled for today.

The Euro might even push lower just to reach the 1.2250 mark.
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