EUR/USD – Can it turn things around?

Or are there bigger falls to come?

The euro is trading lower against the dollar again after a brief rebound late last month. But was the rebound brief or is there more to come?

While the one-hour chart appears to show no shortage of momentum, the latest daily candle appears to indicate some hesitation. That appears to be contradictory, but the fact that this happened so close to the prior lows may be significant.

The question is whether the hesitation near the lows or the momentum on the shorter-timeframe is more significant. It’s hard to ignore either but it should become clear one way or the other, and very soon.

Another failure to break the lows could come on rapidly deteriorating momentum, or a breakout could occur on much more.

Or, we could see a breakaway attempt in the other direction. The first hurdle here is 1.13. A move above here takes us above the descending channel on the one-hour chart, and the 55/89 and 200/233-hour SMA bands.

That would be a strong bullish signal on the hour chart that may generate some upward momentum in the near term and could lead to a broader correction on the longer timeframes.

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

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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