Bottom line: EURUSD medium term structure might have turned bearish against 1.2010 resistance. The currency has dropped through 1.1610 lows, before retracing towards 1.1730 levels respectively. Bears might be poised to resume lower from here.

 Fundamental Outlook:

EURUSD futures are trading marginally higher today around 1.1730/35 mark and it might see some bids coming to push through 1.1780/1.1800 zone. The exchange rate might face renewed selling pressure if it reaches the above mark. Last Friday NFP release was unable to trigger price volatility into risk assets as markets hope for another stimulus package.

Technical Analysis:

EURUSD bears have remained in control since 1.2010 highs carved on September 01, 2020. The currency trades around 1.1730 mark as we prepare to publish and bears might remain push prices lower towards 1.1500 levels at least. The currency might stay below 1.2010 mark, going forward.

EURUSD might rally towards 1.1780 in the near term before bears take control back and turn lower. They might remain inclined to break below 1.1500 handle in the next few trading session to complete an impulse drop from 1.2010 highs.

As seen on the daily chart here, EURUSD seems to have completed an impulse rally between 1.0636 and 1.2010 levels respectively. Ideally, the currency should produce a meaningful corrective drop from here, before finding enough support to resume higher.

EURUSD might drop through 1.1160 levels, which is the fibonacci 0.618 retracement of the above impulse rally between 1.0636 and 1.2010 respectively. High probability remains for bulls to be back in control, if prices manage to reach there.

Most traders might be inclined to hold short positions and also look to sell around 1.1780 resistance. The protective stop might be placed above 1.2010 handle, while target potential remains below 1.1500 and 1.1160 respectively..

Prepared by

Harsh Japee, Technical Analyst.

EURUSD Chart

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