EURUSD – Remains Bearish Despite Finding Support

The euro has been under pressure against the dollar over the past few days since running into significant resistance from the 144-day simple moving average and descending trend line, from 14 July highs. This came as divergences were appearing on the 4-hour chart (see EURUSD – Divergence at Major Resistance).

Not only did the pair fail at this level, it also formed a double top, the neckline of which was broken shortly after it broke below the ascending trend line, from 21 July lows.

EURUSD 4hr

The pair has now run into some support around 1.09, the price projection from the double top and also a previous level of support and resistance, and a round number.

While we may see some consolidation, the 4-hour and 1-hour charts are not showing any signs of momentum loss. The last couple of candles on the daily chart are also rather bearish.

EURUSD 1hr

If this level is broken, the next notable level of support is 1.0870 – 22 July lows – followed by 1.0808-1.0820. Aside from being a key area of support since 27 April, this may also coincide with the ascending trend line from 13 May lows, providing additional support at this level.

EURUSD Daily

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Historical Position Rations

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.