EURO : Key Levels

(Mon, 11 Jan 2021). The Euro could be at risk of further losses against the US Dollar in the near term, as price slices through key uptrend support. However, the trading bloc’s currency may continue to gain ground against the Japanese Yen and British Pound. Here are the key levels to watch for EUR/USD, EUR/JPY and EUR/GBP in the weeks ahead.

EUR/USD DAILY CHART – ASCENDING CHANNEL BREAK HINTS AT FURTHER LOSSES

The EUR/USD exchange rate may extend its recent slide lower after climbing to fresh multi-year highs on January 6 (1.2349), as price collapses through Ascending Channel support and the psychologically pivotal 1.2200 mark.

With the RSI diving back towards its neutral midpoint, and a bearish crossover taking place on the MACD indicator, the path of least resistance appears lower in the near term.

A convincing break below the December 4 high (1.2178) would probably ignite a more extensive pullback towards the 34-day exponential moving average (1.2138). Clearing that likely carves a path for sellers to probe the December 9 low (1.2059).

Alternatively, clambering back above 1.2200 could open the door to a retest of the yearly high (1.2349), if buyers can overcome mobile resistance at the 8-EMA (1.2238).

EUR/JPY DAILY CHART – TENTATIVE BREAK OF BULL FLAG RESISTANCE HINTS AT GAINS

EUR/JPY rates, on the other hand, appear to be gearing up for an extended topside push after slicing through Bull Flag resistance and the April 2019 high (126.79). However, a bearish Hanging Man candle just shy of the 2019 high (127.50) suggests that a reversal lower could be in the offing, if sellers can successfully force price back below the 8-day EMA (126.77).

A daily close back below 126.70 could trigger a pullback towards the monthly low (126.04), with a break probably bringing range support at 125.70 – 125.90 into the crosshairs.

Conversely, an impulsive move higher looks likely if support at the 8-EMA remains intact. The Bull Flag’s implied measure move suggesting EUR/JPY may climb an additional 2% from current levels to probe the psychologically imposing 129.00 mark.

EUR/GBP DAILY CHART – COILING UP IN SYMMETRICAL TRIANGLE

EUR/GBP rates are continuing to gyrate within the confines of a Symmetrical Triangle, as prices begin to consolidate above psychological support at 0.9000. With price continuing to track above the sentiment-defining 200-day moving average (0.8982), and the MACD indicator hovering above its neutral midpoint, the path of least resistance seems to favour the upside.

A daily close above the 100-MA (0.9034) probably generates a push to challenge range resistance at 0.9070 – 0.9085. Hurdling that likely carves a path to test triangle resistance, with a daily close above 0.9175 ultimately needed to validate the continuation pattern.

The Symmetrical Triangle’s implied measured move suggesting buyers could drive the exchange rate towards the March 2020 high (0.9499).

DISCLAIMER ON

GFS ASIA TEAM

• 0
• 0
• just now
• 0