On the daily chart below for
EURUSD, we can see that with the latest rejection of the February high at
1.1033, we may have a possible double
top in play.
The price failed to break above the high as the US
Retail Sales missed expectations across the board giving the
market some recessionary vibes.
The buyers though keep leaning on
the red long period moving
average, so a break below that MA would be significant for the sellers. The
next thing to watch is the US Jobless Claims report todays and the US PMIs
tomorrow. In case the data deteriorates further, we are likely to see another
selloff as the market may switch from the rates trade to the recession trade.
On the other hand, benign data may keep weighing on the US Dollar and push the
pair higher.
EURUSD technical analysis
On the 4 hour chart below, we can
see that the price is trading within a rising channel. At the moment, the price
is consolidating near the lower bound of the channel with a bearish bias given
that the moving averages are crossed to the downside.
We can also see that the whole
rally within the channel is diverging with the MACD, which is generally a sign of a
weakening momentum, and we can generally see pullbacks or reversals. If this is
a pullback, then the price should bounce from the lower bound of the channel
and rally towards the upper bound. On the other hand, if the price breaks below
the lower bound, then we may see a reversal and the price falling towards the
1.0759 support as the first target.
On the 1 hour chart below, we can
see the current mini range. This is the one to watch in conjunction with the
economic data results. If the data is benign and the price breaks above the
range, then we should see the buyers piling in and the upper bound of the
channel being targeted.
On the other hand, if the data
deteriorates and the price breaks below the range and the lower bound of the
channel, then the sellers should jump onboard and extend the selloff to the
next support at 1.0759.
This article was written by ForexLive at www.forexlive.com.