HomeContributorsTechnical AnalysisEUR/USD: Double Failure at Parity Raises Risk of Recovery Stall

EUR/USD: Double Failure at Parity Raises Risk of Recovery Stall

The Euro eased below 0.90 handle in early European trading on Thursday, weighed by Wednesday’s 1% drop, as dollar bulls regained traction on comments from Fed policymakers that the central bank is going to continue raising interest rates until price stability will be restored.

Weak EU PMI data, released on Tuesday and Wednesday, showed that the economic activity is continuing to slow, adding to darkened outlook.

The double-rejection at parity barrier and subsequent weakness, suggest that the latest recovery is losing steam and might be over.

The notion is supported by technical signals as 14-d momentum remains in the negative territory and stochastic is reversing from overbought zone.

Fresh weakness generated initial bearish signal on break through first support at 0.9890 (20DMA / Fibo 23.6% of 0.9535/0.9999 upleg and probe below daily Kijun-sen (0.9866), with signal to be boosted by extension and close below 0.9822 (Fibo 38.2% of 0.9535/0.9999) and confirmed on close below 10DMA (0.9783).

Psychological 1.00 and falling 55DMA (1.0024) mark solid barriers and the risk of recovery stall is expected to remain in play while the price action is capped here.

Res: 0.9926; 1.0000; 1.0024; 1.0066.
Sup: 0.9877; 0.9822; 0.9782; 0.9767.

Windsor Brokers Ltd
Windsor Brokers Ltdhttp://www.windsorbrokers.com/
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