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Eur/USD : Fresh Breakout

(Fri, 24 July 2020). EUR/USD testing multi-year Fibonacci resistance- bulls at risk into 1.1600/21. Trade remains constructive while above 1.1437- topside breach exposes 1.1712. Euro is poised to mark a fifth consecutive weekly advance with EUR/USD up more than 1.4% since the Sunday open. The rally takes price into a multi-year Fibonacci resistance and while the broader outlook remains constructive, the immediate advance may be vulnerable near-term. These are the updated targets and invalidation levels that matter on the EUR/USD price charts heading into the close of the week.

 

EURO PRICE CHART – EUR/USD DAILY

Euro Technical Price Outlook we noted that EUR/USD was trading, “just above a key support pivot we’ve been tracking and the focus is on a reaction off this threshold.” The region was defined by the Fibonacci support confluence at 1.1167/87- price registered a low at 1.1185 into the start of July before ripping higher with the advance now testing subsequent resistance at the 50% retracement of the 2018 decline / October 2018 high at 1.1595-1.1621.

A breach / close above this threshold is needed to mark resumption towards subsequent resistance objective at 1.1712 and 1.1815/22. Initial daily support now 1.15 with bullish invalidation now raised to the March high-day close / 2019 open at 1.1437/45. A close below this threshold would be needed to suggest a larger reversal is underway.

 

EURO PRICE CHART – EUR/USD 120MIN

Notes: A closer look at Euro price action sees EUR/USD trading within an ascending pitchfork formation with the recent rally stalling here at the 75% parallel / key resistance. Initial support along the median-line backed by 1.15 and 1.1437/45 – both levels of interest for possible downside exhaustion IF reached.

Bottom line: Euro is testing multi-year Fibonacci resistance here at the 1.16-handle and the immediate advance may be vulnerable while below this threshold- watch the close. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops – be on the lookout for an exhaustion low while within this formation with a close above 1.1621 needed to mark resumption of the broader uptrend.

 

 

 

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