EUR Forecasted Lower by the Technical Analysts
The question now is whether we are at the start of a fresh downturn for the Euro, or whether this is a corrective pullback ahead of a continuation of July's strength.
We hear from a number of technical forecasters to try and build a picture of the Euro / Dollar's outlook for the coming days.
ICN Financial Markets say:
"The pair managed to move to the upside last Friday but is still limited below 1.3315. Despite that the pair failed the intraday downside move, but stability below the referred to level might bring negativity back.
"Of note, breaching 1.3315 might push the pair to test the previous top at 1.3415 and perhaps further. For now, since the pair is trading below the intraday interval is at 23.6% correction bearishness remains valid.
"The trading range for this week is among the key support at 1.3070 and key resistance at 1.3500.
"The general trend over short term basis is sideways targeting 1.2775 as far as 1.3600 is daily-closing."
Shaun Osborne at TD Securities says:
"Choppy trading over the past few days leaves EUR/USD ending the week still looking overbought (with the slow stochastic oscillator rolling over bearishly on the daily chart) and trend resistance on the daily chart at 1.3311 just about holding the EUR advance.
"Overbought stochastic oscillator signals have done an OK job of calling the major highs of late (bearish signal confirmed by a move back under 75%).
"We also note that that daily trend resistance coincides (roughly) with strong, overhead resistance on the weekly chart. While the EUR has popped higher today, we rather think that the balance of technical risks suggests that EUR strength may not persists and that short/medium-term risks actually pointlower overall. Bullish prospects are only enhanced by a sustained move above 1.3412. "
A wave analysis of EUR/USD by Roboforex shows:
"Euro is being corrected; the price is moving at the level of 78.6% again. If the bears are able to rebound from this level, the market will continue moving downwards. The target will be in the area between the levels of 161.8% and 38.2%."
Craig Erlam at Alpari UK says:
"There was a lot of indecision in this pair last week, despite some significant swings both higher and lower. The result was the formation of a doji candle on the weekly chart, which following the three bullish candles before it, tends to indicate a bearish reversal.
"The fact that the pair failed to break above two descending trend lines, one dating back to May 2011 and the other January this year, is also a bearish signal as it suggests there’s plenty of sellers trying to defend this level. We are seeing another push higher this morning but I expect it to come up against more resistance again between 1.3315 and 1.3350.
"If we do break above this level, the next targets for the pair will be 1.3415, 1.3520 and 1.3710. Alternatively, any move lower should see the pair target 1.32, finding support along the way around 1.3250."