Hello traders! Today we’ll look a the short perspective of the EUR/USD, the most traded currency pair. While the Eurozone economy has been strongly affected by the coronavirus, it will take a lot of time to recover. This could be the reason why most EUR pairs will move against the Euro, and this also applies to the EUR/USD.
The 1-hour chart shows that price has broke below the uptrend trendline as well as the 200 Simple Moving Average. Price has reached 1.0766 low but then corrected up. On the correction EUR/USD has reached and rejected two very important resistance indicators. First being the 200 SMA and the second 38.2% Fibonacci retracement level. After some consolidation EUR/USD re-tested 1.0872 resistance level but failed to close above on higher timeframes.
Today EUR/USD broke another uptrend trendline,which might be the sing of the downtrend continuation. Besides, pair remains below the 200 SMA suggesting the validity of the downtrend. The nearest downside target is seen at 1.0754, which is 127.2% Fibonacci retracement level. However, if this support will be broken, EUR/USD should be expected to move much lower in the long run.
On the upside potential, only the daily break and close above recent high at 1.0885 will invalidate bearish scenario. In this case there could be stronger upside correction, although it is highly unlikely that the trend will reverse up for the long term.
Bias: Strongly bearish 1.0885
Potential Resistance Zone: 1.0840 – 1.0870
Potential Targets: 1.0754
Have a profitable trading!