EURUSD – Selling Continues But Divergence Remains

The euro has broken lower against the dollar again today following a short period of consolidation and 1.07 is once again coming under some pressure.

Prior to this move we had seen a divergence appearing in the pair, with the stochastic making higher lows even as the pair fell from 1.0865 to 1.0707. This suggested that the move may be losing some momentum and today’s selling could confirm this.

EURUSD 4hr

At the moment it’s too early to tell but the ongoing divergence is still possible and the same could form on the MACD histogram.

It should be noted that while this should act as a red flag for a possible correction, it is secondary to price action which continues to look bearish at this stage.

EURUSD Daily

If the pair continues to push lower then it could find support again around 1.0650. Below here, further support could be found around 1.0520 followed by this year’s lows, around 1.0460.

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.