EUR/USD Upside Limited

EUR/USD Technical Analysis

The Backdrop

The EUR/USD has remained technically weak over the short, medium and long-term, bulls repeatedly struggled to rally the pair above the 1.1265 resistance level last month, which eventually led to the creation of a bearish head and shoulders pattern across the lower time frames.

Any moves higher in the EUR/USD pair have been increasingly driven by recessionary fears towards the United States economy rather that genuine buying interest towards the euro currency.

The week ahead offers plenty of scope for EUR/USD volatility with the United States economy releasing a raft of high impacting economic data and the European central bank delivering a rate decision and also their latest economic projections for the eurozone economy.

Technical Outlook

Sellers recently failed to bring the EUR/USD pair below the April monthly trading low, at 1.1109 level, which helped to create a bullish higher-low and further encouraged short-term technical buying in the EUR/USD.

Looking at the four-hour time frame, bulls are now attempting to build upside momentum above the EUR/USD pair’s 50-period moving average, while the MACD indicator on the four-hour time frame is now trending higher and is also attempting to turn bullish.

Key technical resistance on the four-hour time frame is now found at the EUR/USD pair’s 200-period moving average, at 1.1194, and the former weekly trading high, at 1.1215. Bulls will ideally need to rally the EUR/USD pair above its former weekly trading high to shift the negative short-term bias. Major medium-term resistance is found at the 1.1265 levels, with moves above this key area needed to negate the bearish head and shoulders pattern. Strong bullish moves above the 1.1265 level may eventually provoke a test of the pair’s key 200-day moving average, at 1.1377.

Going in-line with the current bearish trend, a bearish breakout below the 1.1109 support level this week will trigger the bearish head and shoulders pattern into action, which holds a downside projection of around one-hundred and fifty pips. Key support to the downside is located at the 1.1060 level and of course the psychological 1.1000 technical level.

Similar

30.11.2023 16:36 Top Three Trade Ideas for December 2023

Hey folks, it’s a wrap to yet another month in the 2023 calendar, and I’m guessing you know what that means - time for another episode in the “What To Trade” series. For December, I will be mapping out trade more cautiously as the market volatility often drops

28.11.2023 16:22 Can USD Recover?

The EUR/USD pair is making gains, approaching multi-month highs around 1.0960, driven by a weakened USD and Christine Lagarde's somewhat hawkish remarks before the European Parliament. Minor housing data from the U.S., specifically New Home Sales for October, came in below expectations but didn't significantly impact the pair. Lagarde, President of the...

21.11.2023 12:48 CPI Release Will Boost The CAD

Canada's forthcoming Consumer Price Index (CPI) data, set for release on Tuesday, is projected to show a year-on-year decline in inflation to 3.2% for October from the previous 3.8%. This potential inflation dip might offer leeway for the Bank of Canada (BoC) to maintain its overnight rate target at 5.0% in the...

Latest news

08.12.2023 14:41 Oil Prices Plunge On Falling Fuel Demand Concerns

The energy industry has undergone several major changes in the XXI that are becoming increasingly apparent…

08.12.2023 08:17 Bitcoin 2024: The Story Is Cyclical

In the dynamic world of financial trading, understanding the nuanced relationship between the Federal Reserve's key interest rates and Bitcoin can be a game-changer…

07.12.2023 17:38 Will NFP Be Positive for the US Dollar?

As the US Non-Farm Payrolls (NFP) take center stage, this month's data gains special attention, particularly after the unemployment rate took a concerning turn in the previous month. The US ADP Employment Change reveals a significant decline, with the economy adding 298K new jobs...