General dollar strength is in the background, rebounding after being oversold following Last Friday’s weak US Non Farm Payrolls. Tomorrow’s ECB meeting may set the tone for the euro’s cross against the dollar.
Where EURUSD has been
The euro plunged below the pivot at 1.2000 dollars in mid-June and spent much of the time since then below its 60 day MA. The daily 60-MA is still sloping down.
What EURUSD is doing now
Drilling down to the EURUSD H4 chart, we can see the euro currently ranging sideways between 1.1675-1.1945 dollars, and widely around a pivot at 1.1810. EURUSD couldn’t punch through the ceiling at 1.1910 despite the weak US NFP last week and is now testing weak bids around the 1.1810 pivot.
Where EURUSD might be
I personally don’t care what the ECB decides tomorrow. On the D1 chart above, the euro has corrected from the low of 20 August to close a few times above the daily 60-MA. This is a bullish sign and may see the euro testing the 1.2000 pivot resistance soon.
On the H4 chart above, the pivot support at 1.1810 seems quite firm.
The danger to this bullish outlook is found on the H1 chart below.
EURUSD – H1 Chart
Looking at the H1 history all the way to June, my target had always been for the euro to re-test 1.1965. But EURUSD had twice failed to close convincingly above the first major resistance around 1.1880 dollars.
Euro bulls may consider fresh euro longs at current levels with tight stop loss around 1.1800 or just wait for the approach to 1.1765 with a view for another whack at 1.1880.
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.