The pair exactly touched the 100Dema and changed the direction. In our Friday’s article we recommended positional selling with sl 1.1250 on a weekly closing basis or intraday selling with sl 1.1315. The pair made a high at 1.1298 and drifted to 1.1175. Today at the Asian session, the pair was rejected at 20Wsma once again trading at 1.1194 compared to Friday’s closing at 1.1198. The pair managed to hold above a 2-month high. On the weekly chart, the pair gave an upside break of 590 pips. It’s a pure technical view. In the fundamental aspect, the pair is weak due to divergence between the ECB and Fed policies. On the daily chart, the nearest resistance seems between 1.1290 and 1.1310 100Sama and 100Dema respectively. If the price manages to close above 1.1310, bulls can extend their rally towards 1.1400, 1.145, and 1.1530. Until the price closes above 1.1310, the situation favours bears. Maybe some intraday pullbacks will be possible. The soft USD has been supporting the euro bulls. The pair’s support is found at 1.1175, 1.1100, 100.00 FE and crucial support zone between 1.1050 and 1.1030. Before the price closes above 1.1310, we expect bears to drag the pair towards 1.1100 or 1.1050. In case of a daily close below 1.1050, bears take the complete control towards 1.0875. This week’s pattern is framed between 1.1050 and 1.1310.
Intraday view: On the one-hour chart, 5 days later the pair gave a lower low formation. If the price closes below 1.1200 today as well, we can conclude the weekly trend was capped at 1.1300. From an intraday view, we recommend selling below 1.1175 with targets at 1.1115, 1.1100, and 1.1070. The trend change level are seen between 1.1050 and 1.1030 (median 1.1040 34hrsma). For bulls, small buying trade is possible above 1.1220 with targets at 1.1250 and 1.1290.
Upcoming events: Traders eye Spainish, Italian, and German manufacturing PMIs. Except Spain, we expect the positive readings from the rest. On Friday, Spain gave better readings than France and Germany. If the revised figures support the euro, bulls can paint spikes up to 1.1300, not beyond that I guess. US factory orders report is due today. In April, the factory orders reversed to positive. If the same repeats, another intraday panic towards 1.1100 will be possible.
Trade: Selling below 1.1175
The material has been provided by InstaForex Company – www.instaforex.com