EUR/USD upward correction on the way

on Nov 17, 2014
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The strength seen in the euro during the last couple of sessions, which held it above the key support level of 1.2500, has suggested some signs of a recovery and thus the 1.2500 level will be a significant one  for the euro bulls this week.

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The 4-hour chart shows the pair has been in a clear downtrend since June 2014. After the pair tested 1.2500, it made several attempts to break higher, but the 50-period SMA provided strong resistance near the 1.2900 and the 1.2700 areas, preventing the price from testing the descending trend line. 

Bearing the above in mind, if the buyers manage to maintain the price above the psychological level of 1.2500, the next target for the pair would be the 1.2600 level which coincides with the 50-period SMA. From there, if the bulls manage to win the battle then we could see further pressure on the 1.2700 level. Our bullish scenario is supported by the MACD oscillators, since it is moving upwards and above its trigger line, suggesting that the pair is ready to push higher. Furthermore, the RSI and the Stochastic moved away from their oversold levels indicating some weakness to the downtrend. 

Alternatively, a failure to break above the 1.2600 level, could provide an opportunity to retest the key support level at 1.2400, and thus would negate any bullish scenarios for the EUR/USD pair.



Report by

Efthivoulos GRIGORIOU


Technical Analyst

RISK DISCLAIMER The content of this analysis does not contain investment advice or recommendation and should not be considered as a solicitation to buy any financial instruments or products. JFD Brokers is not liable for any damages, which would be/are caused by individual comments and statements regarding this analysis and accepts no liability in respect of completeness and correctness of the content. Thus, the investor exclusively bears the risk and is solely responsible for his/her investment decisions. The presented analysis does not take into consideration any personal investment objectives, financial circumstances or needs. Trading Foreign Exchange and Contracts for Difference (CFDs) is highly speculative and may not be suitable for all investors. Please ensure that you fully understand the risks involved.

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