EUR/USD breaks through 200-hour SMA

Oct 18, 2017

Morning outlook - EUR/USD breaks through 200-hour SMA

In accordance with expectations, the Dollar continued to gain value against the common European currency, experiencing pressure from the 55-, 100- and 200-hour SMAs as well as the weekly PP. Despite the fact that the pair failed to pass through the weekly S1 at 1.1735 from the first attempt, it is still expected to move in the southern direction, trying to reach the 100% Fibonacci retracement level at 1.1715.

This scenario is supported not only by the average market sentiment, which remains 57% bearish, but also by an aggregate of technical indicators, which sends strong sell signal for this trading session. The only event than might add some volatility in the markets and lead to short-term recovery of the Euro are opening remarks that will be delivered by Mr. Draghi at the ECB conference.

Oct 19, 2017

Note

EUR/USD fails to slip below weekly S1

Initially the currency rate was expected to break through the weekly S1 and try to reach the 100% Fibonacci retracement level. However, a release of worse than expected American housing data gave the opposite impulse, which returned the pair back to the weekly PP at 1.1807.

On the one hand, the fact that the pair two times in a row failed to slip below the 1.1735 mark and is located now above the 100- and 200-hour SMAs suggests that it might continue to climb to the top. On the other hand, the average market sentiment remains 62%. Moreover, an area near 1.1816 represents a notable resistance, which the pair might struggle to cross. Plus, the further path to the north might be also obstructed by the boundary of a descending channel and the 55-day SMA near 1.184.

Oct 20, 2017

Note

EUR/USD finds new cellar at 1.1858

Although Spanish authorities decided to suspend Catalonia’s autonomy, the common European currency did not show negative reaction to this news. In fact, it bounced off from a combination of the 100-, 200-hour SMAs and the weekly PP and managed to break through the upper boundary of one of the descending channels. After failing to bypass the 1.1858 level three times in a row it slipped back to the above weekly PP.

On the one hand, the 64% average bearish market sentiment and anticipation of Janet Yellen speech later this day play in favour of appreciation of the buck. On the other hand, the southern side remains protected by a bunch of moving averages, which have already stopped the pair from falling below the 1.1800 mark. Moreover, it seems that the pair is moving in a new rising wedge pattern.