Technical Analysis – EURUSD remains supported within channel
October 27, 2023 2:27 pm
EURUSD has been switching between gains and losses around the lower band of a short-term bullish channel at 1.0540.
The US core PCE inflation came as expected at 3.7% y/y on Friday, but personal spending clocked in slightly higher than analysts anticipated at 0.7%m/m, providing some support to the dollar.
The technical signals are not encouraging, with the RSI falling back below its 50 neutral mark and the MACD changing direction back to the downside to meet its red signal line.
Still, sellers may not take full control of the market unless the price closes below the upward-sloping channel, or more importantly slides back into the broad bearish channel at 1.0505. If the decline continues, support could next occur around October’s low of 1.0447, while a drop below 1.0400 could shift the spotlight to the 1.0330 barrier taken from November 2022.
An upside correction above the 20-day exponential moving average (EMA) could improve market sentiment, likely lifting the price towards the 50-day EMA. The 23.6% Fibonacci retracement level of the previous downtrend could also come into consideration in the same area at 1.0640. If the bulls breach that wall, the pair could gain access to the channel’s upper band at 1.0700. Even higher, resistance could develop somewhere between the 200-day EMA and the 38.2% Fibonacci of 1.0763.
All in all, the latest negative wave in EURUSD has not confirmed a bearish bias yet. For that to happen, the price will need to slip below 1.0505.
EURUSD has been switching between gains and losses around the lower band of a short-term bullish channel at 1.0540.
The US core PCE inflation came as expected at 3.7% y/y on Friday, but personal spending clocked in slightly higher than analysts anticipated at 0.7%m/m, providing some support to the dollar.
The technical signals are not encouraging, with the RSI falling back below its 50 neutral mark and the MACD changing direction back to the downside to meet its red signal line.
Still, sellers may not take full control of the market unless the price closes below the upward-sloping channel, or more importantly slides back into the broad bearish channel at 1.0505. If the decline continues, support could next occur around October’s low of 1.0447, while a drop below 1.0400 could shift the spotlight to the 1.0330 barrier taken from November 2022.
An upside correction above the 20-day exponential moving average (EMA) could improve market sentiment, likely lifting the price towards the 50-day EMA. The 23.6% Fibonacci retracement level of the previous downtrend could also come into consideration in the same area at 1.0640. If the bulls breach that wall, the pair could gain access to the channel’s upper band at 1.0700. Even higher, resistance could develop somewhere between the 200-day EMA and the 38.2% Fibonacci of 1.0763.
All in all, the latest negative wave in EURUSD has not confirmed a bearish bias yet. For that to happen, the price will need to slip below 1.0505.
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