After five consecutive high days, the EURUSD has been muted around the 1.0600 mark during early European trading hours on Wednesday. The couple has had a good week, but the 20-day SMA has been difficult to overcome. At 1.0640, close to the 23.6% Fibonacci retracement of 1.1274-1.0447, the upper barrier of the bearish channel could provide …
After five consecutive high days, the EURUSD has been muted around the 1.0600 mark during early European trading hours on Wednesday.
The couple has had a good week, but the 20-day SMA has been difficult to overcome. At 1.0640, close to the 23.6% Fibonacci retracement of 1.1274-1.0447, the upper barrier of the bearish channel could provide a greater threat.
If the bulls break out of the channel on the upside, the 50- and 200-day EMAs at 1.0700 and 1.0763, respectively, could be the first to be seen. The latter point corresponds to the Fibonacci number of 38.2%. As a result, a successful bounce above it might spark a significant rally towards the 50% Fibonacci level of 1.0860.
If the market remains in the downward channel and closes below the 20-day EMA, support could form around 1.0500. The bears might then retest October’s bottom of 1.0447 before falling to the channel’s lower boundary at 1.0380. Another failure there would depress market sentiment, likely lowering the price to 1.0316 as on November 30, 2022.
To summarize, the recent positive rotation in EURUSD is not very appealing as important resistance levels remain aloft. To regain long-term purchasing confidence, the pair must break above 1.0640 and strengthen above its longer-term EMAs.
Risk disclaimer:
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.
