Fxequity

Current Euro Respite Could also be Quick-lived


EUR/USD Value Evaluation

  • EUR/USD fundaments favour greenback post-festive interval.
  • Technical patterns current in each weekly and each day charts.
  • IGCS factors to short-term uncertainty.

EUR/USD FUNDAMENTAL BACKDROP

The Euro has managed to halt losses towards the U.S. dollar over the festive interval which is considerably anticipated because the dollar traditionally tends to wane with U.S. corporations redeploying funds offshore.

From a central bank perspective, the divergence between the Fed and ECB is obvious with the U.S. adopting a much more hawkish strategy relative to the ECB. This could come into impact in 2022 giving added impetus to the EUR/USD downtrend.

EUR/USD TECHNICAL ANALYSIS

EUR/USD WEEKLY CHART:

EUR/USD weekly chart

Chart ready by Warren Venketas, IG

Weekly price action on EUR/USD reveals the continuation of the long-term symmetrical triangle (black) with bias to the draw back regardless of an oversold Relative Strength Index (RSI) studying. Additional upside is on the playing cards however ought to costs attain the 1.1500 psychological level, sellers may re-enter the market extending the general downtrend.

EUR/USD DAILY CHART:

EUR/USD daily chart

Chart ready by Warren Venketas, IG

The short-term body each day chart paints the same image with candlesticks forming a sample just like that of an ascending triangle (yellow). This sample typically presents itself as a bullish continuation sample however on this case the previous development is downward nonetheless, an upside breakout is feasible with 1.1400 and 1.1500 serving as resistance targets. A break under triangle help will then convey into consideration the November swing low at 1.1186.

Resistance ranges:

Help ranges:

  • Triangle help (yellow)
  • 1.1186

IG CLIENT SENTIMENT DATA FAVORS NEITHER BULLS NOR BEARS

IGCS reveals retail merchants are presently lengthy on EUR/USD, with 60% of merchants presently holding lengthy positions (as of this writing). At DailyFX we sometimes take a contrarian view to crowd sentiment nonetheless, as a result of the each day change in lengthy positions (-8%) fell in extra relative to quick positions (2.8%), the resultant sign stays combined which is in line with the technical evaluation outlined above.

Contact and comply with Warren on Twitter: @WVenketas





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *