Chart of the week – EUR/USD
EUR/USD potential bullish signals detected at range support
Short-term technical analysis
Time stamped: 17 Jul 2021 at 1:00pm SGT
Source: CMC Markets
- The recent -203 pips decline seen in the EUR/USD from its 25 June high of 1.1975 to 14 July low of 1.1772 has reached the lower boundary of a 7-month “Symmetrical Triangle” range configuration in place since 6 January 2021.
- In conjunction, bullish signals have been detected as well; the on-going decline from the 25 June minor high of 1.1975 has evolved into a potential minor bullish reversal “Descending Wedge” configuration coupled with a bullish divergence signal seen on the 4-hour Relative Strength Index (RSI) at its oversold region. These observations suggest that recent downside momentum of price action has started to wane which advocates a potential recovery in EUR/USD at least in the short-term horizon.
- Watch the 1.1770 key short-term pivotal support and a break above 1.1850 intermediate resistance (upper boundary of the minor “Descending Wedge”) may trigger a short-term push up towards the next resistances at 1.1990 and 1.2110.
- On the flipside, a 4-hour close below 1.1770 invalidates the short-term push up scenario for a continuation of the two-month decline since 25 May high to retest the 31 March swing low of 1.1710 and below it opens up scope for a further down move towards 1.1610 (4 November 2020 medium-term swing low).
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
