15, November 2016

EUR/USD (a 4-hour chart)

General overview

The euro slightly retreated from eleven month lows amid mixed Eurozone data staying in the red in the light of Donald Tramp victory.

Current situation

The euro gapped lower at the open when prices jumped from 1.0850 to 1.0830 on Monday. The euro did not fill the gap and continued moving downwards, trading in a near-term descending channel. The pair met a barrier around 1.0800 which slowed down its downward trajectory during the Asian hours. After a brief consolidation phase the EUR/USD managed to break the level and extended its losses towards 1.0750. Sellers tested the level and set a daily low at 1.0727 post-European open. After testing 1.0750 the common currency temporally rolled back above the broken level. Sellers broke the level and moved prices lower in the NY session. The prices are well below the moving averages in the 4 hours chart. The moving averages direction is downwards. The resistance is seen at 1.0750, the support could be found at 1.0700.

According to the technical indicators the EUR/USD is oversold and holds within negative levels. The MACD histogram decreased which indicates the sellers’ strength. The RSI indicator is near overvalued territory, favoring a new move lower.

Trading recommendations

A break below 1.0700 will trigger the next leg of move for the pair. In this scenario sellers will push prices lower and may test the level 1.0650. To ease the downward pressure the EUR/USD pair needs to return to 1.0850.