EURUSD has been under considerable pressure as of late, driven by the diverging monetary policies of the ECB and the Fed, both of whom are considering acting in December.
The result has been the pair falling from 1.15 to 1.09 in just a couple of weeks where it appears to have found some support from the ascending trend line – 13 March lows.
Since finding support here, the pair has experienced a minor correction but is once again attempting to break lower, a move that would bring May and July lows into consideration, around 1.08. This is a very significant support level for the pair and a break of it could prompt another considerable move lower.
As it stands, the trend line support is continuing to provide support for the pair, although there are signs that the bears haven’t given up yet. The most recent 4-hour candle is a quite bearish, albeit smaller, marabuzo candle and the current one is yet to break back through the marabuzo line.
Momentum also appears to be growing as the pair closes in on the trend line, which could not be said at the first time of asking.
It’s also notable that during the most recent rally, or correction, on Friday, the pair failed to move above Wednesday’s highs, a sign that the bears are in control. That said, this could continue to be the case during a consolidation as well, although in many cases, consolidation would also be bearish eventually.
As you can see from the OANDA orderbook, client open orders suggest 1.09 is a key level of interest and as it stands, buy orders slightly outnumber sell orders.
To get access to the OANDA orderbook and all of our other trading tools, visit OANDA Forex Labs.
N.B. There is a lot of US data being released and Federal Reserve policy makers speaking between now and Friday which could have a big impact on this pair. It’s worth monitoring the economic calendar so you know when these releases are due.