EUR/USD: Buyers Stopped Out With Fake-Out

Published date: 22/03/2019

This pair has been able to gather bullish momentum over the last two weeks seeing highs of 1.44800. It has been an interesting few months for the Euro and Pound with this month being more intense as the Brexit deadline approaches this month end.

On Wednesday British Prime Minister Therese May request a 3-month extension from Brussels leading to a short term surge in price on Euro and the pound. From a technical point of view, this saw us breakout from a descending channel which we have ranged in from the beginning of the year.

We can see price was unable to maintain upside momentum and was forced back into the channel with a much-needed retracement in play following a 260 upside rally. Price is currently sitting below a key level of support around 1.13100. It will be crucial to see how price responds from here, seeing that it has shown bullish intentions this could most probably be a new higher low forming.  Favoured Fibonacci regions would be a good indicator and extra confluence as to the extent to which we can retrace.

We should keep an eye out to see whether we can get a daily body closure above 1.13100 and whether can clear to the 1.134 resistance region for further confidence. Should we see an upside continuation beyond the plotted channel, we can look to 1.15150 as a potential target. 

US Dollar manufacturing and service PMI fundamental release this afternoon could play crucial in deciding the next phase of price action. However, being a Friday, it may be best to wait out entering any opportunities until next week.


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