Is EURUSD exhibiting the first signs of recovery?
The market has twice tried to rise above the critical mark of 1.142, and failed — the last time around 20 March. From here, the market plunged to the critical resistance level of 1.118. On Tuesday the market formed a Doji at precisely this point. A Doji, in the classical interpretation of Japanese candle formations, is seen as a sign of uncertainty.
The MACD line of the oscillator is below its trigger line, which is considered a bearish sign. The histogram is also below its zero line, which is also bearish. However, the histogram may be showing the first signs of approaching its zero line. An overstepping could be interpreted as a hesitant bullish sign.
The shorter 38-day smoothing line is below the 50-day moving average line, but the two lines are converging. If the 50-day line crosses the 38-day line from bottom to top this would be a bullish sign.
It will be decisive in the next few days whether the bulls can defend the area around 1.118 and perhaps even breakaway with an upward movement.
On the way up, the first resistance, on the way to the two highs from late February and late March will be in the 1.132 to 1.142 range. If the market manages to jump above this level this time, further resistance is waiting in the 1.150 and 1.157 areas.
If the bulls fail to dominate the market and the pair falls below the 1.118 level, the first significant support could be in the 1.111 range. Further support can be found in the 1.104 and 1.096 ranges.
EUR/USD Daily Chart | Source: ActivTrader
Written by Daniel Schuetz, External Analyst
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