EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5457; (P) 1.5526; (R1) 1.5599; More

EUR/USD's sharp fall from 1.5594 and break of 1.5452 minor support suggest that recovery from 1.5360 has completed after touching 4 hours 55 EMA. Further decline is now expected to retest mentioned 1.5342/60 support zone. As discussed before, Sustained trading below 1.5342 will indicate that decline from 1.6019 has resumed and set the stage for deeper fall to next short term target of 1.4966 cluster support (61.8% retracement of 1.4309 to 1.6019 at 1.4962) and probably below. On the upside, while another recovery cannot be ruled out, further decline is still expected as long as EUR/USD stays below 1.5644 resistance.

In the bigger picture, as mentioned before, EUR/USD's rise from 1.4309 should have completed at 1.6019 with a diagonal triangle pattern that started at 1.5342 and with bearish divergence condition in daily MACD and RSI. Firm break of 1.5342 support, which will also have EUR/USD sustaining below 55 days EMA (now at 1.5490) too, will confirm this case and deeper decline should then be seen to 1.4309 and 1.4966 support zone. However, strong rebound from here , followed by break of 1.5644 resistance, will suggest that price actions from 1.6019 is probably just developing into another sideway consolidation. But still, risk is on the downside before sustained break of 1.6019 high.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box