EUR/USD has put in a fast reversal over the past week following the 1.1400 test ahead of the NFP report on Friday. But the true test of trend is what happens in the counter-trend backdrops, so the question now is whether EUR/USD bulls can push through a key area of resistance that's come back into play.
At 1.1686 is the 76.4% retracement of the 2021-2022 major move. I've looked at that setup a few times in these pieces, and notably that Fibonacci sequence has shown a number of inflections and turns. Back in 2023, the 61.8% marker caught the highs. Last year, for a large portion of the year, the 38.2 and 50% levels marked a range. And then earlier this year, as parity calls were aplenty around EUR/USD, it was the 23.6% retracement that came into play in January to hold the low, with a higher-low and February which led to a strong reversal in March. So much for parity, eh?
Well since then the Fibonacci retracement has continued to illustrate interest and most recently it's been the 78.6% and 76.4% retracements. The high for today so far is right at that 76.4% marker and while bears haven't exactly taken control yet, given the support test in the US Dollar, there appears to be open framework for at least a pullback, and if that can show, perhaps there could be more.
For USD-weakness I still think Cable (GBP/USD) is a more attractive vehicle but for EUR/USD, bears need to drive through 1.1560-1.1593 to illustrate greater control. Along the way there's shorter-term supports at 1.1663 and 1.1632. - js
At 1.1686 is the 76.4% retracement of the 2021-2022 major move. I've looked at that setup a few times in these pieces, and notably that Fibonacci sequence has shown a number of inflections and turns. Back in 2023, the 61.8% marker caught the highs. Last year, for a large portion of the year, the 38.2 and 50% levels marked a range. And then earlier this year, as parity calls were aplenty around EUR/USD, it was the 23.6% retracement that came into play in January to hold the low, with a higher-low and February which led to a strong reversal in March. So much for parity, eh?
Well since then the Fibonacci retracement has continued to illustrate interest and most recently it's been the 78.6% and 76.4% retracements. The high for today so far is right at that 76.4% marker and while bears haven't exactly taken control yet, given the support test in the US Dollar, there appears to be open framework for at least a pullback, and if that can show, perhaps there could be more.
For USD-weakness I still think Cable (GBP/USD) is a more attractive vehicle but for EUR/USD, bears need to drive through 1.1560-1.1593 to illustrate greater control. Along the way there's shorter-term supports at 1.1663 and 1.1632. - js
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.