HomeContributorsTechnical AnalysisEUR/USD: Bears Face Strong Headwinds at Key Support Zone

EUR/USD: Bears Face Strong Headwinds at Key Support Zone

The Euro is consolidating in early Thursday, following a sharp fall on Wednesday (the pair was down 0.5% in the biggest daily loss since Apr 30), driven by fresh risk aversion.

Bears found a footstep above strong supports at /1.0790/80 zone (top of thick daily cloud / 200DMA / Fibo 38.2% of 1.0601/1.0895 rally) and looking for fresh direction signals.

Near-term action is weighed down by a large Wednesday’s bearish candle, formation of failure swing pattern and 10/20DMA’s bear cross.

On the other hand, momentum is still positive on daily chart and a larger uptrend from 1.0601 intact while the price action stays above 200DMA / Fibo support / daily cloud top which would generate initial signal of healthy correction, if the price bounces strongly.

Fundamentals remain favored for dollar, as hopes for Fed rate cut anytime soon are fading, due to sticky inflation, while markets focus on key economic events – release of US revised Q1 GDP and weekly jobless claims on Thursday and PCE report, Fed’s preferred inflation measure on Friday, which will provide fresh signals.

Expect strong bearish signal on firm beak of 1.0780 zone, while jumping above initial resistance at 1.0816 (20DMA) would ease immediate downside pressure, but extension and close above 10DMA (1.0838) to provide stronger bullish signal.

Res: 1.0816; 1.0825; 1.0838; 1.0860.
Sup: 1.0780; 1.0748; 1.0724; 1.0700.

Windsor Brokers Ltd
Windsor Brokers Ltdhttp://www.windsorbrokers.com/
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.

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