26, July 2016

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The euro remained almost unchanged on Monday. The single currency is close to the monthly lows against the dollar in spite of the positive German statistics. The USA dollar is supported by the upcoming Fed meeting.

Current situation

We remain bearish on EUR/USD’s prospects. The euro began the week with small gains, however, it failed to regain the 1.1000 level and fell from the daily highs. The EUR/USD has been in a bearish trend for 3 weeks on the daily chart. The 4 hours chart is neutral. The resistance is seen at 1.1000, the support lies at 1.0900.

MACD is in the negative area. The histogram decreased which indicates the sellers’ strength. RSI returned to the oversold area, its signal line decreased that also indicates sellers’ strength.

The trading instrument made an attempt to break the 50-EMA in the 1 hour chart, but failed and was rejected downwards. The price is below the bearish 50-EMA in the 4 hours chart. The moving averages (50, 100 and 200) are moving downwards which is a sell signal.

Trading recommendations

The euro continued moving lower yesterday. We expect a near-term drop to test the 1.0900 support.