EUR/USD Technicals Suggest Bears Will Be at the Wheel This Week
Europe’s single currency concluded February eking out marginal gains against its US counterpart, delivering what many technical analysts will acknowledge as an indecision candle. Overall, the EUR/USD has been (and remains) in a downtrend since 2008, sporting clear lower lows and lower highs on the monthly chart.
Despite January’s engulfing candle (textbook engulfing candles focus on the real bodies, not range highs/lows), February offered limited downside. Immediate technical observations on the monthly timeframe draw focus to the 50-month Simple Moving Average (SMA) at $1.1134, a dynamic value that provided resistance alongside horizontal resistance at $1.1233 back in mid-2023. Support also continues to call for attention at $1.0516.
Meanwhile, price action on the daily timeframe is working between resistance at $1.0883 and support from $1.0739 (the 200-day SMA is nestled within at $1.0824 which price has been drawn to in recent days). Beyond current support exposes the monthly support level highlighted above at $1.0516, while exploring beyond $1.0883 could have price take aim at $1.1011 resistance. Another point of technical interest on the daily chart is the potential for a Head and Shoulders Top pattern to form, housing a left shoulder at the $1.1017 29 November 2023 high, a head at the $1.1139 28 December 2023 high and possibly a right shoulder at the $1.0888 22 February high.
H1 Resistance Area on the Radar
From a shorter-term perspective, the $1.08 handle has withstood a number of downside attempts since 20 February. With that being said, $1.08 buying appears to be softening since the $1.0888 high: each test of $1.08 failed to print a meaningful higher high (shown by a descending resistance line taken from the high of $1.0888). This suggests that although buyers step in from $1.08, the pressure behind the moves is waning. Technical levels to be aware of this week are resistances at $1.0860 and $1.0846 and support below the $1.08 handle at $1.0789.
EUR/USD This Week?
In view of the longer-term downtrend and scope to move lower on the monthly chart until support at $1.0516, along with the daily chart showing price action testing the underside of its 200-day SMA (and room to push south until support at $1.0739), medium-term technicals lean in favour of bears for the time being. Given this, the resistance between $1.0860 and $1.0846 on the H1 scale may prove too much for EUR/USD bulls and deliver a ceiling area to work with for sellers (in line with the bigger picture), targeting at least H1 support from $1.0789.
Despite January’s engulfing candle (textbook engulfing candles focus on the real bodies, not range highs/lows), February offered limited downside. Immediate technical observations on the monthly timeframe draw focus to the 50-month Simple Moving Average (SMA) at $1.1134, a dynamic value that provided resistance alongside horizontal resistance at $1.1233 back in mid-2023. Support also continues to call for attention at $1.0516.
Meanwhile, price action on the daily timeframe is working between resistance at $1.0883 and support from $1.0739 (the 200-day SMA is nestled within at $1.0824 which price has been drawn to in recent days). Beyond current support exposes the monthly support level highlighted above at $1.0516, while exploring beyond $1.0883 could have price take aim at $1.1011 resistance. Another point of technical interest on the daily chart is the potential for a Head and Shoulders Top pattern to form, housing a left shoulder at the $1.1017 29 November 2023 high, a head at the $1.1139 28 December 2023 high and possibly a right shoulder at the $1.0888 22 February high.
H1 Resistance Area on the Radar
From a shorter-term perspective, the $1.08 handle has withstood a number of downside attempts since 20 February. With that being said, $1.08 buying appears to be softening since the $1.0888 high: each test of $1.08 failed to print a meaningful higher high (shown by a descending resistance line taken from the high of $1.0888). This suggests that although buyers step in from $1.08, the pressure behind the moves is waning. Technical levels to be aware of this week are resistances at $1.0860 and $1.0846 and support below the $1.08 handle at $1.0789.
EUR/USD This Week?
In view of the longer-term downtrend and scope to move lower on the monthly chart until support at $1.0516, along with the daily chart showing price action testing the underside of its 200-day SMA (and room to push south until support at $1.0739), medium-term technicals lean in favour of bears for the time being. Given this, the resistance between $1.0860 and $1.0846 on the H1 scale may prove too much for EUR/USD bulls and deliver a ceiling area to work with for sellers (in line with the bigger picture), targeting at least H1 support from $1.0789.
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