Although euro's selloff from 1.1364 (Friday) to as low as 1.1286 in New York yesterday on cross-selling in euro suggests further choppy trading below Dec's 6-week peak at 1.1386 would continue, subsequent strong rebound signals price may continue to gyrate inside 1.1386-1.1273 broad range before prospect of a downside break, below 1.1273 yields weakness towards 1.1235. The bearish channel on the daily time frame has prevailed since early June. Euro versus US Dollar has failed to break to the upside above the daily resistance 1.1380 and the 1.1440 price at the upper trend line of bearish channel. While the exponential moving average 50 on the daily time frame is also acting as a strong resistance to the pair.

BULLISH AND BEARISH OPPORTUNITIES/ CONDITIONS :

EUR/USD consolidates Monday’s losses above 1.1300, around 1.1330 during Tuesday’s Asian session.

In doing so, the major currency pair keeps the corrective pullback from an upward sloping support line from November 24 and the 200-SMA.

Given the steady RSI and firmer Momentum lines, the latest rebound is likely extending towards a one-week-old resistance line near 1.1360.

However, any further advances will be challenged by the December-end peak near 1.1385 and the 1.1400 threshold.

Alternatively, the stated 200-SMA and short-term support line, respectively around 1.1300 and 1.1280, restricts the quote’s immediate downside.

Also acting as the key support is the 61.8% Fibonacci retracement level of late November to December advances, close to 1.1260.

It’s worth noting that the repeated failures on the way to 1.1400 keep EUR/USD bears hopeful despite the latest corrective bounce.

EURUSD Will Respect the Bearish Channel

farhan fazal

Jan 11 2022