Friday, October 18, 2019
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Technical Analysis – EUR/USD trapped under resistance trend-line

EUR/USD managed to quickly recover from 28-month lows last week but once again the bulls did not have the strength to close above the down-trending line drawn from the 1.1411 level.

The short-term bias is now looking neutral-to-bearish as the RSI eases momentum marginally below its 50 neutral level and the red Tenkan-Sen is stabilising well under the blue Kijun-Sen line.

For a meaningful rally, buyers need to snap the descending trend-line seen around 1.1100 and particularly close above the 50-day simple moving average (SMA) currently near 1.1128. An extension above the previous high of 1.1163 could cement the latest rebound and stretch it towards the 1.1200-1.1230 resistance zone.

On the other hand, another rejection from the descending line and a pullback below the 20-day SMA could initially see a retest of the 1.1000 -1.0950 area and then a review of the 28-month low of 1.0925. Beneath the latter, the sell-off could pause near the 1.0830 former support level before a stronger barrier potentially appears around 1.0700.

In the medium-term picture, the market continues to print lower highs and lower lows, with the falling 50-day SMA reducing the odds for an outlook reversal.

Summarising, EUR/USD is expected to register a neutral-to-bearish print in the short-term unless the price breaks above 1.1128. In the medium-term, the downward pattern is likely to stay in play.


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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


Source: XM

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