EUR/USD tech outlook and review...
After puncturing the 1.22 handle seen on the H4 timeframe, the EUR/USD clocked a weekly low of 1.2165. It was from here, the lower limits of a daily support area at 1.2246-1.2164, did we see the unit reclaim 1.22 and push higher yesterday.
The US dollar index was unable to extend gains on Thursday, which, as we know, is EUR/USD supportive. In addition to this, US economic data offered little support. Housing starts came in lower than expected, as did the Philly Fed manufacturing index. Initial jobless claims, however, did better expectations at 220K vs. EXP: 250K.
Although upside appears to be favored, given the trend the euro is entrenched within right now, let’s remain mindful to the fact that there is key weekly resistance also in the fray: a weekly broken Quasimodo line at 1.2287 that merges with two weekly trendline resistances (1.1641/1.6038). Add this to a H4 broken Quasimodo line at 1.2276, followed closely by the 1.23 handle, we can see that there is still ample resistance in sight.
Market direction:
In the event that 1.23 is breached, we believe that the unit may push for a test of a daily broken Quasimodo line at 1.2359.
With buyers possibly weakened around 1.22 from the recent whipsaw, traders may attempt to reclaim this number and approach H4 demand located at 1.2111-1.2134.
Given the above factors, our bias is somewhat neutral for the time being. On the one hand, the uptrend remains intact, thus bolstering the buy side, and on the other hand, we have a strong weekly resistance which has so far been respected.
Data points to consider: US prelim UoM consumer sentiment at 3pm, followed by FOMC member Quarles speaking at 5.15pm GMT.
Areas worthy of attention:
Supports: 1.2111-1.2134; 1.2246-1.2164; 1.22 handle.
Resistances: 1.2287; weekly trendline resistances; 1.2276; 1.23 handle; 1.2359.
The US dollar index was unable to extend gains on Thursday, which, as we know, is EUR/USD supportive. In addition to this, US economic data offered little support. Housing starts came in lower than expected, as did the Philly Fed manufacturing index. Initial jobless claims, however, did better expectations at 220K vs. EXP: 250K.
Although upside appears to be favored, given the trend the euro is entrenched within right now, let’s remain mindful to the fact that there is key weekly resistance also in the fray: a weekly broken Quasimodo line at 1.2287 that merges with two weekly trendline resistances (1.1641/1.6038). Add this to a H4 broken Quasimodo line at 1.2276, followed closely by the 1.23 handle, we can see that there is still ample resistance in sight.
Market direction:
In the event that 1.23 is breached, we believe that the unit may push for a test of a daily broken Quasimodo line at 1.2359.
With buyers possibly weakened around 1.22 from the recent whipsaw, traders may attempt to reclaim this number and approach H4 demand located at 1.2111-1.2134.
Given the above factors, our bias is somewhat neutral for the time being. On the one hand, the uptrend remains intact, thus bolstering the buy side, and on the other hand, we have a strong weekly resistance which has so far been respected.
Data points to consider: US prelim UoM consumer sentiment at 3pm, followed by FOMC member Quarles speaking at 5.15pm GMT.
Areas worthy of attention:
Supports: 1.2111-1.2134; 1.2246-1.2164; 1.22 handle.
Resistances: 1.2287; weekly trendline resistances; 1.2276; 1.23 handle; 1.2359.
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