Weakness in EURUSD remains at the start of the new trading week after the pair’s sharp drop following last week’s Fed taper announcement.
Despite a short rally on Friday that led to the EURUSD briefly reaching the 1.37 handle, the pair has remained capped below this key level. On the 4-hour chart there is consolidation just below the 23.6% Fibonacci level (of the move from the November 7 low to the December 11 high) now acting as strong resistance at 1.3690.
This failure to break higher opens the possibility of downside risk to target support at the 38.2% Fibonacci level at 1.3610.
Technical indicators on the 4-hour chart suggest that bearish pressure is in play, with the MACD in bearish territory well below the zero line. Market action remains below the 50 and 100-period moving averages. The RSI is also in bearish territory below 50 although it has bounced from a recent decline to 30.
Due to thin trading volumes and possible short-covering by traders that could lead to a move to the upside in the short term, the euro could find some relief and bounce, also due to the slight easing in the dollar today. Resistance is seen at Friday’s high of 1.3810.
Weakness in EURUSD remains at the start of the new trading week after the pair’s sharp drop following last week’s Fed taper announcement.
Despite a short rally on Friday that led to the EURUSD briefly reaching the 1.37 handle, the pair has remained capped below this key level. On the 4-hour chart there is consolidation just below the 23.6% Fibonacci level (of the move from the November 7 low to the December 11 high) now acting as strong resistance at 1.3690.
This failure to break higher opens the possibility of downside risk to target support at the 38.2% Fibonacci level at 1.3610.
Technical indicators on the 4-hour chart suggest that bearish pressure is in play, with the MACD in bearish territory well below the zero line. Market action remains below the 50 and 100-period moving averages. The RSI is also in bearish territory below 50 although it has bounced from a recent decline to 30.
Due to thin trading volumes and possible short-covering by traders that could lead to a move to the upside in the short term, the euro could find some relief and bounce, also due to the slight easing in the dollar today. Resistance is seen at Friday’s high of 1.3810.
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